tag:blogger.com,1999:blog-10046315717299490922018-01-30T15:38:40.321+00:00PropertynewshoundGraham Norwood - residential property journalistRay Girvanhttp://www.blogger.com/profile/05556764642402680159noreply@blogger.comBlogger291125tag:blogger.com,1999:blog-1004631571729949092.post-17452265061724758532018-01-30T15:35:00.000+00:002018-01-30T15:38:40.380+00:00Consultations: Why Do So Few Participate?<div class="separator" style="clear: both; text-align: center;"><a href="https://3.bp.blogspot.com/-gmI287Wf-Ss/WnCRd00Te4I/AAAAAAAABOY/ApZRqFCSMY4CLr5oRZMBhDj9Z-K908nngCLcBGAs/s1600/images-6.jpeg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="https://3.bp.blogspot.com/-gmI287Wf-Ss/WnCRd00Te4I/AAAAAAAABOY/ApZRqFCSMY4CLr5oRZMBhDj9Z-K908nngCLcBGAs/s200/images-6.jpeg" width="200" height="113" data-original-width="299" data-original-height="169" /></a></div>It’s no surprise that figures don’t always show the results or consequences we expect - even if they are entirely accurate.<br /><br />Look at recent political votes. Donald Trump clearly won the Presidency of the United States, under its electoral college rules, yet polled almost three million fewer votes than Hillary Clinton. <br /><br />At home, Labour clearly lost the 2017 General Election on 12.88m votes compared to the Conservative’ total of 13.64m - yet its performance created a mood music far more triumphalist than that from the Tories, because of Labour’s poor expectations.<br /><br />These peculiarities came to mind when I saw the figures for the consultation exercises undertaken by the government on key housing issues in the past year or so.<br /><br />It’s not that the government didn’t fulfil its side of the deal - a few weeks ago I blogged on just how many consultation exercises there have been, so no one can say we haven’t been asked for our views.<br /><br />There was plenty of publicity for each consultation and although we can quibble about when they were announced and whether their durations were sufficient, the government certainly did not hesitate to ask the industry and the public for their views.<br /><br />However, my beef now is on how few responses there have been. <br /><br />Here’s a list of key consultations in 2017 for which the Department of Communities and Local Government has released response figures: <br /><br />- Consultation on proposed banning order offences under the Housing and Planning Act 2016: there were 223 responses;<br /><br />- Extension of mandatory licensing of Houses in Multiple Occupation including minimum room sizes: there were 395 responses;<br /><br />- Tackling unfair practices in the leasehold market: 6,075 responses;<br /><br />- Basement developments and the planning system: 88 responses;<br /><br />- Banning letting fees paid by tenants: 4,724 responses;<br /><br />- Planning and affordable housing for Build To Rent: 221 responses.<br /><br />Of the two large responses, the significant majority of responses came from private individuals not from industry individuals.<br /><br />So on the leasehold consultation, of the 6,075 responses some 5,336 were private individuals of which 2,790 were leaseholders living in a house and 1,699 leaseholders living in a flat.<br /><br />On the lettings fees consultation, of the 4,724 responses some 50 per cent were from individual tenants - not counting tenant organisations and groups like Shelter.<br /><br />Even in these examples, I am surprised at the relatively modest number of respondents: on the letting agency fees consultation in particular, there was immense publicity in all areas of the trade press and amongst trade organisations, yet agents‘ responses totalled only around a third of the total - so that’s about 1,500. <br /><br />The government, quite reasonably, says consultation is not just a numbers game: it proposes a policy before the consultation, and does not necessarily amend it just because a majority of respondents back it or oppose it. <br /><br />And the government certainly does not abandon a policy because there are relatively few who respond, as the high-profile announcements on banning orders for rogue agents and landlords demonstrated: the DCLG went to town on publicity for the policy between Christmas and the New Year, despite admitting there were just 223 responses. <br /><br />But is it not better if more individuals from the industry do their bit and respond? <br /><br />Trade organisations are very diligent in this regard, and of course have the time and resources to respond; and I appreciate that an agent has plenty of other things to do than complete an online form which can be long and not especially user-friendly.<br /><br />Yet however sceptical we may be about whether we’re listened to, these consultation exercises are amongst the few opportunities that exist for us to have a say. <br /><br />We’re all quick to complain about policies which we believe unfairly affect our industry: shouldn’t we make it an objective in 2018 to respond to these consultations, too?<br /><br /><small>If you would like to to comment on this article, click <a HREF="mailto:graham.norwood@btinternet.com">HERE</A> to e-mail Graham.</small> <a href="http://www.twitter.com/PropertyJourn"><img src="https://twitter-badges.s3.amazonaws.com/follow_me-a.png" alt="Follow PropertyJourn on Twitter"></a>Graham Nhttp://www.blogger.com/profile/03519044956367730763noreply@blogger.com0tag:blogger.com,1999:blog-1004631571729949092.post-3474991448275715422018-01-04T09:18:00.001+00:002018-01-04T09:21:01.823+00:00Five Things That Didn't Happen In 2017<div class="separator" style="clear: both; text-align: center;"><a href="https://4.bp.blogspot.com/-Ewx8mwM7hmg/Wk3xX_AG1ZI/AAAAAAAABN4/ADpEtx56HpkuyZ2qaQj9px6U_R2XylGtwCLcBGAs/s1600/images-5.jpeg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="https://4.bp.blogspot.com/-Ewx8mwM7hmg/Wk3xX_AG1ZI/AAAAAAAABN4/ADpEtx56HpkuyZ2qaQj9px6U_R2XylGtwCLcBGAs/s200/images-5.jpeg" width="200" height="133" data-original-width="275" data-original-height="183" /></a></div>It’s traditional before Christmas to either review the year past or anticipate the one ahead - but I’m intrigued about what was supposed to happen over the past 12 months, yet didn’t.<br /><br />In the wider world pundits predicted the Conservatives would walk the next General Election, that right wing populists would win elections in Germany, France and Holland, and that England would fail to qualify for the 2018 World Cup. Well, they were all wrong.<br /><br />Some pundits in the agency industry had dodgy predictions too: these are my favourite five non-happening events of the year just closing. Please let me know if there are others I should have covered (and when doing so, feel free to overlook my own personal predictions a year ago that turned out to be hopelessly wrong).<br /><br />Oh, and in the meantime, have a good Christmas and New Year....<br /><br /><br /><b>Letting Agents’ Fees Ban</b>: This may be on its way but what happened to it in 2017? It was first announced, after all, on November 23 2016 and in the intervening 13 months a consultation process has been held and the ban formally agreed by government. But it’s not been implemented. I’m in no rush to see it implemented but why this delay?<br /><br />It’s popular to blame Brexit for legislative backlogs but given a template operates already in Scotland, it would not be too draining of civil service or political resources to finish the job in England. Perhaps the fact that agents are already pulling back their fees (notice how few stories there have been on this subject in the consumer media recently?) means the job has effectively been done without the need for a law. <br /><br /><br /><b>Twenty Per Cent Of Agencies Going Bust</b>: On more than one occasion in the past year the industry has been warned that as many as one in five estate agency businesses face closure - not because of a downturn, but because of online rivals.<br /><br />I’m neither underestimating the pressures on traditional agencies nor denying the changing face of the industry but dire warnings of mass job losses - most recently by Moor Stephens accountancy firm - proved wide of the mark in 2017. It’s clear that Purplebricks has made significant impact on the industry in 2017 but as for the other online agents? It’s too early to say, but their gains in the past year seem less than remarkable.<br /><br /><br /><b>The Brexit House Price Slump</b>: Who can seriously deny that the endless soap opera of the UK’s hapless exit from the EU is doing anything but sapping the lifeblood from the economy and from the country’s reputation worldwide? However, it hasn’t led to the housing market bloodshed predicted in the six months after the 2016 referendum result.<br /><br />Localised issues undeniably exist - ask estate agents trying to sell homes in central London, or letting agents in areas of East Anglia where migrant workers have left in droves over the past year. But those pundits who within hours of the Brexit result forecast two years of double digit price falls (and unfortunately for them, their words are easily found via Google) were as mistaken as those Brexiteers who predicted a pull-out would be easy.<br /><br /><br /><b>The Exodus of Landlords</b>: As a landlord myself, I’m more than aware that recent tax changes - notably the phasing out of mortgage interest relief, which started in April 2017 - is making buy to let less profitable. Yet what happened to the flood of landlords quitting the sector as predicted by a few campaigners and some trade bodies? It didn’t happen. <br /><br />The monthly market snapshot produced by the website Home described the exit of landlords just a few days ago as “a trickle” and talking to letting agents (including the one I use) here’s no sign of the mass sell-up predicted by some siren voices. Growth within the sector is certainly negligible but as for the forecast of mass defection...it didn’t take place.<br /><br /><br /><b>OnTheMarket Becoming The Second Largest Portal</b>: Like the queasy feeling after too much cheap booze at the office party, OTM’s failure to live up to its own promise to displace Zoopla as Britain’s second portal has become something of an annual tradition. <br /><br />While some OTM directors look set to be amongst the best-paid in the industry after the Agents’ Mutual 2018 float, there remains fog around real data revealing membership and fees, and a heavy mist over site visits. Like Purplebricks’ completion rates, such figures did not appear in 2017 despite much anticipation.<br /><br /><br /><small>If you would like to to comment on this article, click <a HREF="mailto:graham.norwood@btinternet.com">HERE</A> to e-mail Graham.</small> <a href="http://www.twitter.com/PropertyJourn"><img src="http://twitter-badges.s3.amazonaws.com/follow_me-a.png" alt="Follow PropertyJourn on Twitter"/></a>Graham Nhttp://www.blogger.com/profile/03519044956367730763noreply@blogger.com0tag:blogger.com,1999:blog-1004631571729949092.post-40705503128420533352017-11-02T17:48:00.000+00:002017-11-02T17:48:37.450+00:00Consultation Isn't A Substitute For Action<div class="separator" style="clear: both; text-align: center;"><a href="https://2.bp.blogspot.com/-T-ymRRYdQoM/WftaUqMRi3I/AAAAAAAABM8/y8f-7rBFGCoiLAoQsHLhfY6xiUHg7eJWgCLcBGAs/s1600/images-3.jpeg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="https://2.bp.blogspot.com/-T-ymRRYdQoM/WftaUqMRi3I/AAAAAAAABM8/y8f-7rBFGCoiLAoQsHLhfY6xiUHg7eJWgCLcBGAs/s200/images-3.jpeg" width="200" height="112" data-original-width="300" data-original-height="168" /></a></div>Another week, another consultation - the agency industry can’t complain about not being asked for its views in recent years.<br /><br />The latest was the suggestion for the increased regulation of property management, suggested by Communities Secretary Sajid Javid on Wednesday. <br /><br />Letting Agent Today got there first in terms of trade press coverage (please pardon the boast) but within a few moments of the newsflash hitting readers’ inboxes, I had two emails asking how this consultation differed from one announced a week earlier by the Select Committee for the Department of Communities and Local Government. <br /><br />At first glance they appear broadly similar, although the select committee (which is all-party and independent) is focused more on landlords, while the government (which is... well, the government) is focussed on agents and managers and leaseholders.<br /><br />That’s not the half of it, of course. <br /><br />There is also the DCLG consultation ‘Tackling Unfair Practices In The Leasehold Market’ announced in July this year - that’s the one looking at proposals likely to end up with a ban on new-build leasehold houses following scandals earlier this year.<br /><br />Then there’s consultation into the much-publicised ban on letting agents’ fees (‘Banning Letting Agent Fees Paid By Tenants’) which closed way back in the first week of June but has yet to result in solid proposals. When Chancellor Phillip Hammond first announced the measure last November, he promised a ban would start “in the new year” - although, to be fair, he didn’t specify which new year.<br /><br />By contrast we have seen some results - but only some - following another DCLG consultation. This was the ‘Proposed Banning Order Offences Under The Housing and Planning Act 2016’) consultation which ended in February this year. We’ve seen stiffer fines and some element of banning introduced recently, but those actually came as a result of an earlier DCLG consultation process called ‘Tackling Rogue Landlords and Improving the Private Rental Sector’, which happened back in 2015.<br /><br />Confusing isn’t it? Yet the list of consultations goes on.<br /><br />Did you comment on the “Planning and Affordable Housing for Build to Rent’ which closed in August? Or last year’s ‘Extending Mandatory Licensing of Houses in Multiple Occupation and Related Reforms’? How about the ‘Planning For The Right Homes In The Right Places’ consultation exercise? Or that ‘Fixing Our Broken Housing Market’ consultation in February this year?<br /><br />This is by no means an exhaustive list, as devolved administrations in Wales, Scotland and Northern Ireland have a raft of different consultations going on too, many mirroring those emanating from the DCLG and applying mostly to England. And there are dozens (yes, literally dozens) of consultation exercises on non-agency aspects of the property sector, from construction methods to park homes, from rural planning to starter homes.<br /><br />My point in this chronicle of consultation is not to knock it in principle: after all, we would all shout loudly if we were not asked for our views. But it is to point out that consultation is not an end in itself - it’s not a substitute for action, as increasingly seems the case.<br /><br />We are currently 48 weeks on from the first declaration that letting agents’ fees on tenants would be banned in England: as of now, there’s still no sign of the legislation, creating uncertainty in our industry and probably growing disillusion from those who want a ban.<br /><br />Perhaps it’s a government that’s effectively crippled because of resources funneled into Brexit, making consultation noises to keep some people happy while having little chance of actually finding the civil servants or the parliamentary time to turn these into laws. <br /><br />Whether that’s true or not, we’re just a few weeks away from another Budget where - I predict with some certainty - there will be plenty of measures announced about property. <br /><br />If the measures are about tax, any changes could be (literally) overnight - government has the power to do that; if the changes are about anything else, it’s likely to be slower. <br /><br />And - you’ve guessed it - by slower, I mean after more consultation. Whether any measure announced next month actually sees the light of day, however, is another matter.<br /><br /><br /><br /><small>If you would like to to comment on this article, click <a HREF="mailto:graham.norwood@btinternet.com">HERE</A> to e-mail Graham.</small> <a href="http://www.twitter.com/PropertyJourn"><img src="https://twitter-badges.s3.amazonaws.com/follow_me-a.png" alt="Follow PropertyJourn on Twitter"></a>Graham Nhttp://www.blogger.com/profile/03519044956367730763noreply@blogger.com0tag:blogger.com,1999:blog-1004631571729949092.post-4648493141202346382017-10-06T09:29:00.001+01:002017-10-06T09:30:48.382+01:00Just How Many Types Of Estate Agent Are There These Days?<div class="separator" style="clear: both; text-align: center;"><a href="https://1.bp.blogspot.com/-uWSSorJAtqw/Wdc-on5ofVI/AAAAAAAABMU/QXBfz2jFdCYOIFmeGBI6TIyZSx2WCcAHgCLcBGAs/s1600/CLArNuqWgAAjNo4.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="https://1.bp.blogspot.com/-uWSSorJAtqw/Wdc-on5ofVI/AAAAAAAABMU/QXBfz2jFdCYOIFmeGBI6TIyZSx2WCcAHgCLcBGAs/s200/CLArNuqWgAAjNo4.jpg" width="200" height="133" data-original-width="600" data-original-height="400" /></a></div>It used to be so easy.<br /><br />Around 20 years ago there were what we now call full-service estate and letting agencies, and just about nothing else aside from a few classified ads in local and national papers by individuals trying to sell their own properties.<br /><br />Then, of course, some property entrepreneurs worked out how the internet could list properties - the online agency was born. <br /><br />Online’s first incarnation, many will recall, was as a For Sale By Owner service: individual vendors uploaded their own photographs, wrote their descriptions and hoped for the best. No agent of any kind, virtual or physical, was involved and (like those classifieds in the newspapers) there was arguably little attention paid to the Property Misdescriptions Act. <br /><br />Now there are few such FSBO-style sites in existence (but there are some) and in our era of EPCs, CPRs and other regulatory requirements, a completely self-service online site seems scarcely viable. Hence the birth of what we call Hybrid agency - online with a hint of human involvement.<br /><br />Yet life has quickly become much more complicated and now there seems a plethora of agency business models - a new variation pops up every few days, it seems. <br /><br />So here is my personal summary of the different models - a few of the terms are those commonly used across the industry, but I’ve created a few to help differentiation. <br /><br /><b>Full Service</b>: there seems broad industry understanding of what this means, even if individual firms operating the full-service may vary in their approach to, say, accompanied visits or weekend office opening;<br /><br /><b>Hybrid</b>: The best known example here is, perhaps inevitably, Purplebricks: it offers a broadly online service to the customer, topped up with a level of human advice from a locally-based representative;<br /><br /><b>Cross-over</b>: My guess is that we’ll see more of this in years to come, with established High Street agencies offering an online option which can be ‘upgraded’ to full-service with the same company. The obvious pioneer of this model is Countrywide which claims it is a success;<br /><br /><b>Chain Breaker</b>: I wrote a story about Nested, the most obvious ‘chain breaking’ agency, just a few days ago. It offers a guaranteed price and a guaranteed purchase to the vendor, backing it up by purchasing the property itself if necessary. Arguably this is as much a financial product as an estate agency - but it still sells homes for vendors;<br /><br /><b>Quick Sale</b>: These have been around for years and, perhaps surprisingly, received a relatively clean bill of health in a detailed 2013 investigation by the Office of Fair Trading. There are many highly successful examples, like Quick Move Now, but like part-exchange this kind of ‘agency’ is seen as a last resort by sellers - and it’s a sector that claims to be growing.<br /><br /><b>Regional Digital</b>: This is an agency which operates online (perhaps with, or without, local experts to advise a vendor) but chooses not to use the internet to broaden its customer base outside a specific regional area. An example of this is the relatively new ispymyhome.com which restructed itself to Derbyshire, Lincolnshire, Staffordshire and Nottinghamshire.<br /><br /><b>Digital Platforms</b>: These are digital services which allow existing full-service agencies to have an online outlet too. The business-to-business outlook of the new easyProperty platform appears like this for Guild and Fine & Country member agents; meanwhile some Proptech products like those from OneDome do a similar job.<br /><br /><b>Cheap Online</b>: There may not be many around but those that exist are reminiscent of the early ‘ultra-budget’ FSBO online companies. 99Home, for example, will market your home on Zoopla and Rightmove for £99 “if a seller knows how to use the internet, can host house viewings and have a good knowledge about property sale process”. House Tree, another newcomer, promises to market your home on portals for free so long as you buy into its partner mortgage and conveyancing services too - the fees it earns from that covers its charges to a vendor;<br /><br /><b>Competitive Full-Service</b>: This is an interesting one - full-service agents who are happy to charge online-style prices for their traditional service. The website Agent Locator has discovered that hundreds of branches of full;-service companies are happy to be listed as ‘Purplebricks Price Beaters’: that is, if they get a lead from Agent Locator, as a named ‘price beater’ they will match Purplebricks’ charges, while still charging locally-sourced vendors the usual percentage commission.<br /><br />Life will be simpler again in a few years as the online-based companies merge and consolidate but, for the moment, that’s nine models I can think of. I’m sure there are more, especially with the glut of narrowly-different digital companies now coming out of the woodwork. If you’ve come across some, please add a comment below. <br /><br /><br /><small>If you would like to to comment on this article, click <a HREF="mailto:graham.norwood@btinternet.com">HERE</A> to e-mail Graham.</small> <a href="http://www.twitter.com/PropertyJourn"><img src="http://twitter-badges.s3.amazonaws.com/follow_me-a.png" alt="Follow PropertyJourn on Twitter"/></a>Graham Nhttp://www.blogger.com/profile/03519044956367730763noreply@blogger.com0tag:blogger.com,1999:blog-1004631571729949092.post-49249696664649487582017-07-28T08:03:00.002+01:002017-07-28T08:06:15.359+01:00Scrap The Red Tape and Let's Have Simple Rental Regulation<div class="separator" style="clear: both; text-align: center;"><a href="https://2.bp.blogspot.com/-UK9EJAGR6-Y/WXrhkBcRzyI/AAAAAAAABMA/hDc8cVbhzoEb2DO7SM6u_9rKy9FqVhkNQCLcBGAs/s1600/images-2.jpeg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="https://2.bp.blogspot.com/-UK9EJAGR6-Y/WXrhkBcRzyI/AAAAAAAABMA/hDc8cVbhzoEb2DO7SM6u_9rKy9FqVhkNQCLcBGAs/s200/images-2.jpeg" width="200" height="112" data-original-width="299" data-original-height="168" /></a></div>That the private rental sector has become the government’s whipping boy for housing problems - landlords in particular, letting agents almost as much - is something of a given these days.<br /><br />But when the increased regulation we have become accustomed to gets doubled up, it is the political class rather than the private rental sector that reveals itself as the problem.<br /><br />Let me illustrate my point with two announcements made in recent weeks.<br /><br />In the London borough of Tower Hamlets there is already selective licensing for private landlords (£520 to £660 per property for five years - good revenue for a local authority where 40 per cent of its population privately rents, although some reports suggest that enforcement and take-up of the scheme leave a lot to be desired).<br /><br />Now, in addition to the licensing, there has been the news that the Tower Hamlets Private Rental Charter has been launched. It’s been created by that same council and it sets out the rights which tenants have.<br /><br />The Residential Landlords Association and The Property Ombudsman schemes have endorsed the charter - imagine the publicity had they declined? - and of course it is absolutely right to say that this new initiative highlights the wholly appropriate entitlements that private tenants have to safe, well-maintained, fairly-priced homes.<br /><br />No one can disagree with the sentiment but there is a lack of clarity: no one at Tower Hamlets council could tell me whether letting agents, for example, were expected to join, show support, or slap a sticker in their window to say they are on board.<br /><br />So it’s fair to ask: do we really need another local kitemark or scheme on top of licensing in that London borough?<br /><br />And what of London Mayor Sadiq Khan’s new database of agents and landlords, set to come into effect next year. Will agencies and buy to let investors have to opt in or out of that, too?<br /><br />If so then Tower Hamlets landlords, for example, may have to register with the licensing scheme and the borough’s new charter and the London-wide database. With all this paperwork, where’s the time to work at being a good landlord?<br /><br />Is this really an improvement on a single, well-thought-out regulatory scheme with money spent to enforce it? Or are the new schemes aimed more at making local politicians feel better by introducing additional duplicating measures to a fanfare of press releases?<br /><br />Something similar is happening in and around Bristol where the West of England Rental Standard has been relaunched - it first saw life in early 2016 but didn’t gain traction, so now the idea has been resuscitated with a new PR-friendly name ‘Rent With Confidence’.<br /><br />This is run by Bristol council and backed by a handful of other authorities close by - many of which, of course, have their own licensing schemes that are, in truth, more effective at improving rental conditions than the new headline-grabbing initiative.<br /><br />Again, some local branches of industry trade bodies back the idea - perhaps because they dare not be seen doing otherwise - but is funding the bureaucracy behind a regional voluntary ‘standard’ operated by councils really a better way of spending public cash than funding more trading standards staff to police the already-existing licensing schemes?<br /><br />I think not. And I bet you think not, too.<br /><br />No one should regard this observation as a coded way of saying regulation and licensing are not required in the private rental sector. They certainly are required.<br /><br />But we need a uniform single layer of regulation, applying in Penzance and Pitlochry, not a rag bag of local measures which satisfy the publicity requirements of here-today gone-tomorrow politicians but fail to do justice to the growing numbers of private tenants.<br /><br /><small>If you would like to to comment on this article, click <a HREF="mailto:graham.norwood@btinternet.com">HERE</A> to e-mail Graham.</small> <a href="http://www.twitter.com/PropertyJourn"><img src="http://twitter-badges.s3.amazonaws.com/follow_me-a.png" alt="Follow PropertyJourn on Twitter"/></a>Graham Nhttp://www.blogger.com/profile/03519044956367730763noreply@blogger.com0tag:blogger.com,1999:blog-1004631571729949092.post-42615830795576078502017-06-28T19:52:00.001+01:002017-06-28T19:54:30.103+01:00Reform Buying and Selling - The Industry Should Prepare Now<div class="separator" style="clear: both; text-align: center;"><a href="https://1.bp.blogspot.com/-mc27siStR-4/WVP65OFzpZI/AAAAAAAABLs/dFbi7faGrLw7Al4JVlK_-TCZlMKgAxgswCLcBGAs/s1600/images.jpeg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="https://1.bp.blogspot.com/-mc27siStR-4/WVP65OFzpZI/AAAAAAAABLs/dFbi7faGrLw7Al4JVlK_-TCZlMKgAxgswCLcBGAs/s200/images.jpeg" width="200" height="112" data-original-width="300" data-original-height="168" /></a></div>The banning of letting fees has dominated industry headlines but the June election suggests the real issue for the next several years may be something much bigger - reform of the entire house buying process.<br /><br />Amongst the major political parties only the Conservatives put such substantial reform into their manifesto. But this follows the government’s call last year for evidence about improving the process; now the Conveyancing Association has weighed into the debate with a substantial piece of work outlining ways that transaction can be quicker, easier and most of all more consumer-focussed.<br /><br />My guess is that this issue may be the big one for our industry for the next five years, despite the minority government.<br /><br />As a journalist it is interesting talking to agents and others, often off the record, who appear to be of one mind - they admit the current process is too slow, too cumbersome and now bogged down with almost too much information (a survey on contaminated land prone to flooding 300 metres away from the home being marketed, anyone?)<br /><br />So, from an informed journalist’s perspective, where are the areas that the process could be simplified or digitised or improved - or, indeed, all of these and more?<br /><br />- Ensuring buyers and sellers are as prepared as possible: There is little scope for compulsion here. But should, for example, agents refuse to accept instructions to sell from vendors who have not already instructed conveyancers and have a mortgage for their ongoing purchase (if that is what they are going to do)? Should the process change to allow only buyers with mortgages and conveyancers in place to make offers? Should all vendors have to complete information questionnaires pre-sale, to save time?<br /><br />- Should offers, when accepted, be backed by non-returnable deposits? It is the case in some other countries, with strict definitions for structural problems which at that stage form the only way out of the purchase without losing the deposit.<br /><br />- Up-front information (i): Some of this was behind the unpopularity of HIPs, but is there really no way of having a survey considered ‘neutral’ and acceptable to both vendor and purchaser? Or is the problem really with the ever-cautious solicitors who do not want to incur the risk of having a client agree to something that (s)he has not commissioned?<br /><br />- Up-front information (ii): Can there not be an agreed list of search ingredients, with insurance options? This would mean all parties would know at viewing stage about the seemingly-inevitable proximity of flood plains, contaminated land, chancel repairs and other issues that currently add time and frustration at a later stage - and as a result give nervous buyers more opportunities to pull out? Can there be a legal time limit on search authorities to provide information within an agreed, nationally-uniform maximum period?<br /><br />- Should EPCs and other sale-related surveys have a longer shelf life? It’s not uncommon for some homes to take many, many months for sale - one problem with HIPs was that some elements expired after, at most, six months. A longer shelf life would mean sellers would not have to pay twice, or even three times, for an EPC or other elements of the pre-sale material because their home did not find a buyer.<br /><br /><br />It’s perhaps time for the industry to start thinking about these issues: the Conservatives have proved in their approach to buy to let that they are no longer the ‘hands off, market will decide’ party. Instead they are keen to intervene and in some cases micro-manage. If the industry wants to avoid that, then it should act now.<br /><br /><br /><small>If you would like to to comment on this article, click <a HREF="mailto:graham.norwood@btinternet.com">HERE</A> to e-mail Graham.</small> <a href="http://www.twitter.com/PropertyJourn"><img src="http://twitter-badges.s3.amazonaws.com/follow_me-a.png" alt="Follow PropertyJourn on Twitter"/></a>Graham Nhttp://www.blogger.com/profile/03519044956367730763noreply@blogger.com0tag:blogger.com,1999:blog-1004631571729949092.post-72898348963976202292017-03-30T09:16:00.001+01:002017-03-30T09:18:45.660+01:00Brexit: Don't Let Housing Get Forgotten<div class="separator" style="clear: both; text-align: center;"><a href="https://2.bp.blogspot.com/-_4FN6GMlSUM/WNy-0nt5J5I/AAAAAAAABLY/lyeuQpo-lHQXWUlTUxe6BWJmg6ntmXSYACLcB/s1600/images-4.jpeg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="https://2.bp.blogspot.com/-_4FN6GMlSUM/WNy-0nt5J5I/AAAAAAAABLY/lyeuQpo-lHQXWUlTUxe6BWJmg6ntmXSYACLcB/s200/images-4.jpeg" width="200" height="133" /></a></div>Article 50 has been triggered and yet Brexit remains the big divide across the nation: an issue that shows no sign of healing - with the future of housing one victim of the suspended animation that this country is in for the indefinite future.<br /><br />With two years of negotiations until the UK leaves the EU - with or without a deal - it is stating the obvious to say that the government appears to have time for almost nothing apart from Brexit. <br /><br />During that two years there will not merely be discussions with Europe but also with the rest of the world.<br /><br />While China is likely to be building more airports, while South Korea is set to become more dominant in automotive technology, as Germany becomes undisputed leader of Europe and even as the US under troubled President Trump begins an infrastructure renewal programme involving trillions of dollars ... the UK will be negotiating. <br /><br />The goal our our leaders is for the UK to retain its role as the world’s fifth largest national economy - yes, we are to spend years negotiating to stay precisely where we are now.<br /><br />Unsurprisingly, other initiatives that would occupy even a ‘hands off’ government now appear to be falling by the wayside, with housing one of the most obvious early victims. <br />Just look at the evidence. <br /><br />Firstly there has been delay: we are four months on from Chancellor Phillip Hammond’s clear-cut announcement that there would be a ban on letting agents’ fees levied on tenants in England: no matter how unpopular the measure within our industry, there is a need for clarity and certainty, yet to date even the formal consultation period has yet to be triggered.<br /><br />There was more delay with the Housing White Paper. There was a pledge at the Conservative Party conference by both Chancellor Hammond and Communities Secretary Sajid Javid that there would be “substantial measures” to alleviate the housing shortage announced “by Christmas.” The White Paper eventually came in February. A serious delay? Of course not...but at the start of a new government, when ministers appeared aching to take action in October, their two month target took four months to meet.<br /><br />There was delay, too, on stamp duty reform - if it is to happen. The Chancellor was apparently minded to look at it in the Spring Budget but, again, wanted more time. <br /><br />Secondly there has been abandoned policy: the heavily-promoted pledge to build 200,000 starter homes at 20 per cent below market price - announced by David Cameron in early 2016 and championed by the current government when it came to office in the second half of last year - has been kicked away. <br /><br />Housing minister Gavin Barwell said last week in a response to a parliamentary question: “Starter homes will form an important part of our programmes to help over 200,000 people become home owners by the end of the Parliament. The number delivered will depend on what local authorities consider most appropriate to respond to housing need in their area.”<br /><br />Thirdly, there are likely to be further slowdowns in meeting what targets remain.<br /><br /><br /><br />Many industry figures - even Conservative supporters - were distinctly underwhelmed by the modest ambition of the Housing White Paper. Now even ill-defined targets contained in it may be under threat according to the Royal Institution of Chartered Surveyors which warns that almost 200,000 EU workers may be lost to construction projects - including residential ones - if Britain loses access to the single market.<br />RICS says some eight per cent of UK construction workers are EU nationals - around 176,500 mostly-skilled workers - with a third of construction professionals insisting their projects and businesses relied heavily on foreign labour.<br /><br />Might the foreign labour stay? Might just as many be accessible post-Brexit? Who knows - but the problem right now is that we’re likely to spend two years before knowing for sure.<br /><br />So what is there to do about a government that appears already to have ‘done’ housing until the next election and is concentrating on Brexit, the only show in town? <br /><br />Realistically, only heavy lobbying of ministers, MPs and parties stands will offer even the slightest chance of politicians giving some attention to housing: and remember, those involved in every other policy that feels unloved in this Brexit-fixated era will be doing the same thing, so competition will be fierce.<br /><br />So while Britain’s leaders appear on a treadmill with the objective of simply remaining where we are, it’s up to our industry to remind politicians day-in, day-out about a housing crisis that is still providing too few homes for people - inside or outside the EU. <br /><small>If you would like to to comment on this article, click <a HREF="mailto:graham.norwood@btinternet.com">HERE</A> to e-mail Graham.</small> <a href="http://www.twitter.com/PropertyJourn"><img src="http://twitter-badges.s3.amazonaws.com/follow_me-a.png" alt="Follow PropertyJourn on Twitter"/></a>Graham Nhttp://www.blogger.com/profile/03519044956367730763noreply@blogger.com0tag:blogger.com,1999:blog-1004631571729949092.post-32072574033579920762017-03-01T14:27:00.001+00:002017-03-01T14:27:27.438+00:00And Now For Something Completely Different - Co-Living<div class="separator" style="clear: both; text-align: center;"><a href="https://2.bp.blogspot.com/-SDuqecoj7D8/WLbaKVRa4RI/AAAAAAAABK8/Dk1jkPnLKA8A6jKkZVkBjv8hNyfjUfvOACLcB/s1600/images-3.jpeg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="https://2.bp.blogspot.com/-SDuqecoj7D8/WLbaKVRa4RI/AAAAAAAABK8/Dk1jkPnLKA8A6jKkZVkBjv8hNyfjUfvOACLcB/s200/images-3.jpeg" width="200" height="133" /></a></div>We’re used to stories on how the buying and renting of ‘formal’ accommodation - flats and houses - has become increasingly ‘informal’. <br /><br />By that I mean those stories about the rise and rise of Airbnb and similar platforms for short lets, and about buyers searching for a home on the iPad or smartphone over the breakfast table or in bed last thing at night. James Dearsley’s PropTech column this week suggests flexible tenancy durations will be a consumer demand easier to meet very soon, as the way we ‘do’ property changes thanks to the advent of technology.<br /><br />But what if it’s not just the process of renting, buying, letting or selling that becomes increasingly informal, but the very property commodity at the heart of the deal too?<br /><br />What if it’s not just how we market, book and manage the property product that is being revolutionised? What if it’s the property itself that’s changing out of all recognition?<br /><br />I’m urged to ask these questions because of an article I’ve recently written on the subject of Co-Living. Researching the subject certainly opened my eyes to a generational culture change in the approach to ‘homes’.<br /><br />Co-living is a new form of housing where residents gather around a common interest and activity, rather than a traditional ‘stiff’ tenure or sense of ownership. It is the residential equivalent of Co-working, which uses the sense of ‘shared space’ - no one has a set desk but there are communal resources where (usually IT) workers come in, pay a fee, and use space, utilities and on-site expertise as they see fit. And when they’re finished, they go. <br /><br />To some older readers, a way of living that embraces such informality will smack of the commune or kibbutz-style crazes of the 70s but let me assure you that the professionalism and funding of Co-living is no new-age nonsense.<br /><br />In London there’s a scheme now called The Collective Old Oak where rents are £225 per week - and that includes all utilities, council tax, wi-fi, security and room and linen cleaning. <br />In Berlin scores of Baugruppen or Building Groups exist, similar to Old Oak but with the participants co-owning rather than co-renting. In one, called R50, a six-storey block is home to 18 households each owning part of the property but Co-living within it. <br /><br />There are other Co-living schemes in Hong Kong, Melbourne, Boston, California and New York too, and while each is different from the others, their common denominators include dormitory-style sleeping to make most use of the expensive city-centre space, and a willingness by individuals to share social, eating and often working space too. <br /><br />There’s no prize for guessing what has driven this movement: it’s the cost of traditional renting or ownership, with many from the Millennial generation feeling unable or unwilling to pay market rents and prices for traditional accommodation, especially if they want to be flexible in where they work and live for at least the first part of their adult lives.<br /><br />But here is where the Co-living concept departs from the squats, kibbutzes and communes so beloved of disenchanted young people in the 1970s - today, Co-living is a huge business involving millions of pounds. <br /><br />WeWork, a US shared-working-space company, has started a Co-living off-shoot which is on course to hit a revenue target of $605.9 million by the end of next year. Its portfolio of shared accommodation in the US includes a building on New York’s Wall Street. <br /><br />For people of my age (and perhaps yours, too) the thought of shared living like this is uncomfortable: that’s not the case for many younger people lacking the financial and emotional attachment to mainstream home ownership that older generations have.<br /><br />So just as it’s been a steep learning curve for our industry in the past decade to come to terms with different ways of selling or letting a property, perhaps our task for the decade to come is to accept different kinds of property tenure and ownership.<br /><br />We could, of course, dismiss it all as fluff and nonsense: but then, some people did that about mobile telephones and portals, didn’t they? <br /><br /><br /><small>If you would like to to comment on this article, click <a HREF="mailto:graham.norwood@btinternet.com">HERE</A> to e-mail Graham.</small> <a href="http://www.twitter.com/PropertyJourn"><img src="http://twitter-badges.s3.amazonaws.com/follow_me-a.png" alt="Follow PropertyJourn on Twitter"/></a>Graham Nhttp://www.blogger.com/profile/03519044956367730763noreply@blogger.com0tag:blogger.com,1999:blog-1004631571729949092.post-8598346565483194032017-02-02T13:47:00.001+00:002017-02-02T13:48:19.252+00:00Estate Agents: Independence May Be The Undoing Of Independents<br /><div class="separator" style="clear: both; text-align: center;"><a href="https://3.bp.blogspot.com/-zxn4gclvwy8/WJM4Uek2ErI/AAAAAAAABKo/219t2G8cP103ycoSXc7aM6SCr9Gsn97YQCLcB/s1600/images-2.jpeg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="https://3.bp.blogspot.com/-zxn4gclvwy8/WJM4Uek2ErI/AAAAAAAABKo/219t2G8cP103ycoSXc7aM6SCr9Gsn97YQCLcB/s200/images-2.jpeg" width="200" height="66" /></a></div>The story of the week has been the first steps of a trade body to represent independent estate agents - as those agents account for around 70 per cent of the industry, even in these corporate times, such an organisation could in theory be highly influential.<br /><br />Having met Charlie Wright, the software entrepreneur behind the idea, it’s impossible to doubt his enthusiasm for independent agents in general and this group in particular. <br /><br />Whether or not such a group is necessary, and whether or not it really takes off, he has a passion for his subject which is strong - even by the standards of the agency industry, where dedication and enthusiasm for and against innovations often reach fever-pitch.<br /><br />Wright is realistic enough to admit that unless he gets a (so far unspecified) critical mass of estate agents behind the idea, it won’t fly. But recent history isn’t on his side. <br /><br />An obvious example is OnTheMarket. <br /><br />If three years editing Estate Agent Today and Letting Agent Today have taught me anything, it is that agents - with very few exceptions - hate Zoopla and Rightmove. Yet a common enemy isn’t enough. <br /><br />You don’t need me to explain how many agents took against the tactics of OnTheMarket, even if they backed the principle; they were ferociously opposed to <br /><br />Relatively few agents ‘jumped ship’ from the portals they hate so much and some of those who did are publicly unhappy. As a result, and as OTM approaches its second birthday, it looks a long way from its stated goal of knocking Zoopla off the number two portal position.<br /><br />There are other obvious examples. <br /><br />The industry has ARLA and UKALA - presumably with nuanced differences which mean one organisation offers slightly different services to letting agents to its rival organisation. Likewise we have TPO, the Property Redress Scheme and Ombudsman Service: Property - in other words, three rival redress systems. And we have several landlord organisations such as the RLA and the NLA - but of course there are others, too.<br /><br />Why can’t we agree just to have one organisation representing each interest - it would have more members, more influence and more power?<br /><br />Some less obvious examples come in the shape of ‘direct message’ tweets I have received in recent weeks: they were confidential, so I have no intention of naming names.<br /><br />The first was critical of a particular industry figure because he appeared to support the idea of banning letting agents’ fees levied on tenants; this criticism seemed unreasonable to me, because it’s clear that several other industry figures (albeit perhaps a minority) feel the same way, and because in any case he’s entitled to his view - as we all are.<br /><br />The second tweet was similarly critical of someone else who wants a more prominent role in an established trade body. The objection to him was that he was (apparently) pro-Brexit and thus (apparently) unrepresentative of the property industry as a whole. As above, it strikes me that such criticism is unfair and unreasonable.<br /><br />Both direct messages implicitly urged me to publicise the ‘offences’ of the people in question. Not a hope - these people are entitled to their views.<br /><br />But the point of mentioning these incidents is not to criticise them, nor to ‘out’ their authors. <br /><br />It’s simply to show the passion that exists within the agency industry. It’s strong - very strong - but in most cases it is a passion driven by something laudable: a desire for agents and the industry to do well.<br /><br />The problem is that, in these days of individualism and instant social media expression, such passions are often contradictory: ask five agents what their views are on a contentious topic and the odds are that you’ll get five, maybe six, conflicting opinions. Each will probably be driven by an enthusiasm for the subject.<br /><br />Which brings me back to CIELA, the independent agents’ group set up this week. <br /><br />The founding members say they want “to win the majority support of the approximately 15,000 small independent agency businesses across the country.” That’s a lot of agents to persuade to tow the line - whatever that line turns out to be.<br /><br />It will be a major achievement if it happens and if so much of the industry acts in concert. <br /><br />But let’s be honest - the omens are not good.<br /><br /><br /><br /><small>If you would like to to comment on this article, click <a HREF="mailto:graham.norwood@btinternet.com">HERE</A> to e-mail Graham.</small> <a href="http://www.twitter.com/PropertyJourn"><img src="http://twitter-badges.s3.amazonaws.com/follow_me-a.png" alt="Follow PropertyJourn on Twitter"/></a>Graham Nhttp://www.blogger.com/profile/03519044956367730763noreply@blogger.com0tag:blogger.com,1999:blog-1004631571729949092.post-77030866549230170662017-01-19T17:46:00.001+00:002017-01-19T17:47:05.867+00:00Our Politicians Must Do Better<div class="separator" style="clear: both; text-align: center;"><a href="https://3.bp.blogspot.com/-Rv-ry-jyOLA/WID7UJl8RDI/AAAAAAAABKQ/XXW4DTVeWJIu5BMNs5UuSjg7UEU4i68uQCLcB/s1600/images.jpeg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="https://3.bp.blogspot.com/-Rv-ry-jyOLA/WID7UJl8RDI/AAAAAAAABKQ/XXW4DTVeWJIu5BMNs5UuSjg7UEU4i68uQCLcB/s200/images.jpeg" width="200" height="200" /></a></div>Now I’m not one to lose sleep over politicians, but it strikes me that Communities Secretary Sajid Javid and Housing Minister Gavin Barwell may be about to be embarking on a fool’s errand when it comes to new homes.<br /><br />If well-informed journalists are right, Javid and Barwell are about to get tough with NIMBYs opposed to almost any new homes in their back yard or (in the case of some pressure groups like the Campaign to Protect Rural England) almost anywhere in the country. <br /><br />The get-tough vehicle is to be a White Paper, expected to be released later this month, and aiming to at last create a step-change in the volume of UK house building.<br /><br />The problem for Javid and Barwell is that most of the uber-NIMBYs are in exactly the parts of the country where more homes are needed most - the Home Counties, for example. And those same parts tend to consist of constituencies held by Conservative MPs.<br /><br />So we may be about to embark this spring on a tussle between Conservatives who want to leave a legacy of actually increasingly new-build volumes, and those who want to do all they can to build even bigger majorities in the constituencies they currently hold. <br /><br />The problem is, this tussling - and possibly much of the White Paper - may be a waste of time unless something even more fundamental is done to ensure building takes place.<br /><br />Let me explain what I mean.<br /><br />We all know that successive housing ministers have set targets for new homes: 200,000 a year has been the most popular target of late, extended into one million over five years. <br /><br />And we also know that the past decade has been marked by spectacular failures year after year: the new homes simply have not been built.<br /><br />Many of these housing ministers - John Healey in Gordon Brown’s Labour government, for example, and Mark Prisk and Brandon Lewis under David Cameron’s administrations - are intelligent, informed, serious politicians. They do not make targets to get quick headlines, especially as they know the humiliating legacy they leave if they fail to meet those targets.<br /><br />The problem these ministers have faced time after time is that they have not controlled house building - they have merely tried to control the conditions for house building.<br /><br />So these ministers created structures like the National Planning Policy Framework, New Homes Bonus, even Help To Buy. But house builders have not built - at least not in the quantities and at price-points that help remedy what we all call ‘the housing crisis.’<br /><br />It’s not the fault of the house builders. They are privately owned, often publicly quoted, so operate to make a profit; they are under few social obligations, and under none at all when it comes to making up for government shortcomings. <br /><br />Just because a housing minister may make planning slightly quicker does not mean Persimmon or Barratt Homes has to come running and build what and where the government wants. That’s not the developers’ business - that’s government’s business.<br /><br />So (and I return here to a theme I have explored before) is it not time to return to direct house building: what used to be called ‘council housing’ but could and should have something of a 21st century title these days. Perhaps ‘community housing’?<br /><br />I’m more than aware that council housing has an image problem dating from the 1970s and 1980s; and I’m honest enough to admit that I’d rather live in a privately-owned home (ie, my owner-occupied house) than in one owned by the council or the government.<br /><br />But surely we have enough evidence now to show that affordable housing, whether to buy or to rent, is not an inevitable benefit of planning reform, or incentives to buyers. <br /><br />Put bluntly, if affordable housing isn’t profitable for house builders - irrespective of government targets or initiatives - it simply doesn’t get built.<br /><br />So why not create a 21st century modern brand to describe 2017-style council housing to satisfy those parts of the community not served by traditional house builders?<br /><br />Without this, I have a feeling that Sajid Javid and Gavin Barwell will have several months of fruitless arguing: even if they win their argument and NIMBYs are put back in their boxes, there’s no guarantee that the house builders will provide the type of homes at the prices required to help those currently living in overcrowded conditions, or worse. <br /><br />Unless that happens, we risk being back to square one within a few years: and by then, we’ll have even more people disillusioned with politicians and house builders alike.<br /><br /><br /><small>If you would like to to comment on this article, click <a HREF="mailto:graham.norwood@btinternet.com">HERE</A> to e-mail Graham.</small> <a href="http://www.twitter.com/PropertyJourn"><img src="http://twitter-badges.s3.amazonaws.com/follow_me-a.png" alt="Follow PropertyJourn on Twitter"/></a>Graham Nhttp://www.blogger.com/profile/03519044956367730763noreply@blogger.com0tag:blogger.com,1999:blog-1004631571729949092.post-15180762246804515202016-11-17T20:13:00.001+00:002016-11-17T20:13:33.223+00:00Whither Countrywide<div class="separator" style="clear: both; text-align: center;"><a href="https://4.bp.blogspot.com/-9NHdHjbiSh8/WC4PPdupjrI/AAAAAAAABJ4/UAncIgCVb7QCIwbMWyCTXgiq2TBzra2UACLcB/s1600/images-23.jpeg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="https://4.bp.blogspot.com/-9NHdHjbiSh8/WC4PPdupjrI/AAAAAAAABJ4/UAncIgCVb7QCIwbMWyCTXgiq2TBzra2UACLcB/s200/images-23.jpeg" width="200" height="131" /></a></div>Although Brexit, portal juggling and portal wars have stolen property industry headlines in recent months, there's been one story almost constantly running just below the surface – and sometimes above the surface too.<br /><br />It's 'whither Countrywide'. <br /><br />We know the broad story about its share price (which, let's say at the outset, is neither the only way of measuring the company's activities nor necessarily the best). <br /><br />But the statistics are worth setting out, and make gory reading for Countrywide shareholders who back in March 2014 saw the firm's price sailing high at 686.<br /><br />Spool forward 18 months from that period, to November 2015 – a year ago – by which time Countrywide has a new bedded-in management with radical ideas, clearly set out for company insiders, the industry and shareholders alike.<br /><br />So on November 6 2015 – almost exactly one year ago – the FTSE 100 closed at 6,353; the FTSE 250 (seen by many analysts as being more representative of the wider economic forces impacting on share prices) closed at 17,166. Countrywide's share price closed that day at 414 having lost a third of its value in 18 months. <br /><br />On February 5 2016 – nine months ago – the FTSE 100 was up to 6,117 and the FTSE 250 up to 16,662. Countrywide's price, however, had dropped further to 381.<br /><br />Another three months on and we're at May 5 2016, some while before the EU referendum. The FTSE 100 was at 6,117 and the FTSE 250 at 16,662. Countrywide's share price? Down again, this time to 352.<br /><br />By August 5 we're seeing shares ride relatively high in response to the pound's post-Brexit vote slump. The FTSE 100 is up to 6,784 and the FTSE 250 high at 17,465. Countrywide is down now to 244.<br /><br />So on to the time of writing – November 3 2016 – and the pattern continues. The FTSE 100 is at 6,790 and the FTSE 250 up to 17,582. Countrywide, having fallen through the 200 barrier a few weeks ago, is now down to 181.<br /><br />The game isn't up yet for Countrywide and its retail-led management. <br /><br />Many years of financial journalism prior to writing about property have taught me not to write off Countrywide yet: other firms have produced more Lazarus-like returns from the dead than the one required by Countrywide.<br /><br />But while there can be individually-sound reasons why property shares are losing value more rapidly than other sectors, especially given the uncertainties surrounding Brexit and recent property tax changes, the persistent direction of travel of Countrywide's share price is now beginning to rattle the company.<br /><br />Last week's downgrade of the estate agency's group investment status from 'Buy' to 'Hold' was all the more bitter because it came from Jefferies, a consultancy held in high regard by the property industry and hitherto a vocal City backer of Countrywide's modernisation programme. <br /><br />Even more ominous for Countrywide, perhaps, is the fact that the group is beginning to arouse quiet interest from the very small number of companies in the residential business who – at today's prices – could just about afford to buy it.<br /><br />So what next?<br /><br />Within the next few weeks, one or both of two tipping points may be reached.<br /><br />Firstly, the third quarter trading update – expected before the end of November – will reveal how much, if any, of Countrywide's share of sales transactions has been lost. It may well be that a successful lettings performance may mask any downturn on the sales side, but this will be quickly spotted by investors and reflected in the share price.<br /><br />Secondly, and still on that share price, at just what point will shareholders or possible buyers want to show their hand? The former must surely be dissatisfied with management, and the latter may well start making 'theoretical' enquiries about the process to bring this public company back into private hands.<br /><br />It's possible – just – that Countrywide's problems may be lost in the bigger noise, and things will continue as now well into next year. Wider housing market uncertainty in 2017 and beyond, hinted at this week by forecasts from JLL and Savills, may temporarily disguise the fact that Countrywide is performing less well even than other publicly-quoted firms like Foxtons and LSL.<br /><br />Whatever happens, it would be sad if the modernised baby was thrown out with the bathwater: many agents in other companies, for example, feel the rationalisation of Countrywide's multiple brands in overlapping patches has been long overdue.<br /><br />But the next headlines about Countrywide are unlikely to be far away. <br /><br />There is industry speculation about management changes by Christmas. If these rumours are true the headlines this time are likely to be about bigger things than disgruntled veteran managers moving to rival companies. <br /><br />This time, the headlines may be about the future of Countrywide itself.<br /><br /><small>If you would like to to comment on this article, click <a HREF="mailto:graham.norwood@btinternet.com">HERE</A> to e-mail Graham.</small> <a href="http://www.twitter.com/PropertyJourn"><img src="http://twitter-badges.s3.amazonaws.com/follow_me-a.png" alt="Follow PropertyJourn on Twitter"/></a>Graham Nhttp://www.blogger.com/profile/03519044956367730763noreply@blogger.com0tag:blogger.com,1999:blog-1004631571729949092.post-20643597409302593802016-10-20T16:48:00.001+01:002016-10-20T16:48:10.300+01:00Let's Take The Higher Ground On Overseas Workers And Buyers<div class="separator" style="clear: both; text-align: center;"><a href="https://1.bp.blogspot.com/-o9uF6v5NdW8/WAjnHySVWmI/AAAAAAAABJk/QXmK5zNPQ9MFjc1nUOAzLfyNg0bZWWAfwCLcB/s1600/images.jpeg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="https://1.bp.blogspot.com/-o9uF6v5NdW8/WAjnHySVWmI/AAAAAAAABJk/QXmK5zNPQ9MFjc1nUOAzLfyNg0bZWWAfwCLcB/s200/images.jpeg" width="200" height="100" /></a></div>Some of this week’s headlines - ‘Firms must list foreign workers’ and ‘NHS to no longer rely on foreign doctors’ - should be worrying for the property industry.<br /><br />The worry isn’t about the measures themselves, which may possibly owe more to politicians trying to please a baying conference hall than to what happens in reality. <br /><br />No - the worry is that the mood music created by our politicians’ increasingly shrill tone over immigration and ‘Britishness’ might cause genuine problems for our business.<br /><br />The need to welcome, not deter, overseas interest in Britain was brought home to me on holiday in Singapore and Hong Kong, locations which combine multi-national populations with strong work ethics. In the HK Mandarin Oriental hotel on one weekend there were three property roadshows by agencies selling homes in the UK - so naturally, I popped in.<br /><br />The agents were CBRE, Colliers and Knight Frank but the schemes did not fulfil the usual expectations about developments seeking Far East investors - one was at Colliers Wood, another in Staines (cutely called ‘Staines on Thames’ by Knight Frank), the other near Wimbledon. Prices ranged from a fairly low £335,000 to £745,000 - hardly prime London.<br /><br />Now the negative way of looking at this - and I’m tempted to say it’s how the probe into foreign buyers by the team of London mayor Sadiq Khan might see it - is to say hugely wealthy Far East investors in Hong Kong will be buying relatively low cost homes which would otherwise be purchased by deserving (code for British) first time buyers.<br /><br />Of course, that’s possibly true. And it’s undeniable that many foreign investors, in London in particular, treat their purchases as assets not homes. We’re all familiar with the Buy To Leave problem, and it rightly makes for uncomfortable reading for the property industry.<br /><br />However, there are three other ways of looking at those Hong Kong investors. <br /><br />Firstly, their up-front purchases of off-plan units in those schemes may actually be the deciding factor in the developments even going ahead: without early-phase purchases to give confidence units will sell, they may not be built, for first time buyers or anyone else.<br /><br />Secondly, the apparent glut of overseas buyers in pockets of the south east is unhelpful when there is a housing shortage but it’s frankly a price we pay for living in a free world: the other side of the same coin is that Britons buy holiday homes in Spain and Florida. <br /> <br />Thirdly - and by far the most important reason - is that if there were sufficient homes built for all tenures and for all types of buyer, we wouldn’t have to get worked up about people from overseas buying, frankly, a very small proportion of properties on the market. Will Ukip, and wannabe-Ukippers in the Conservative and Labour parties, therefore advocate a tiny proportion of the Green Belt be given for housing? No, I thought not. <br /><br />And just like the inconvenient truth that some developments may not be built without up-front foreign purchases, so house building may suffer without foreign labour.<br /><br />Jeremy Hunt’s tempting pledge to recruit more British doctors may work - relatively good pay and a profession attracting high public respect has a natural appeal to Brits. <br /><br />But there is a reason why the government has not articulated the same argument about attracting more Britons to many of the building industry’s crafts, let alone to what some people call the ‘rubbish’ jobs like - well, collecting rubbish. That is because, whether we like it or not, Britons have in recent decades relied on foreign labour serving this sector. <br /><br />Economic consultancy CEBR says 4.7 per cent of the UK’s construction work force was born in another EU country; almost as many were born outside the UK and the EU. <br /><br />With a skills shortage already, the mood music of recent weeks may lead to the public demanding fewer overseas workers in the building trade - if that happened, it’s another inconvenient truth that it would worsen the industry’s ability to deliver new homes. Across all industries, the Office for National Statistics reports that there are 3.45m non-Britons working in this country, yet only 1.63m unemployed so the figures don’t match the rhetoric.<br /><br />I guess many of the shrill voices who ‘want our country back’ spend time watching Netflix, enjoy a glass of wine, drive Volkswagens and chomp imported food served by well spoken east European waiting staff, without realising they’re directly benefitting from globalisation. <br /><br />Likewise, the building of our homes relies on ‘foreigners’. Ask the house building firms. Let’s not throw that away in a spasm of faux-patriotism, when what we really should demand is the building of many more houses and apartments, pure and simple.<br /><br /><br /><br /><small>If you would like to to comment on this article, click <a HREF="mailto:graham.norwood@btinternet.com">HERE</A> to e-mail Graham.</small> <a href="http://www.twitter.com/PropertyJourn"><img src="http://twitter-badges.s3.amazonaws.com/follow_me-a.png" alt="Follow PropertyJourn on Twitter"/></a>Graham Nhttp://www.blogger.com/profile/03519044956367730763noreply@blogger.com0tag:blogger.com,1999:blog-1004631571729949092.post-27454503174604026022016-09-08T16:51:00.001+01:002016-09-08T16:53:14.400+01:00Why Estate Agents Will Always Need Portals<div class="separator" style="clear: both; text-align: center;"><a href="https://3.bp.blogspot.com/-drw-odALqNo/V9GJSYIOITI/AAAAAAAABJU/BPgzDGKj-9AF6q1IACIh4ifwY9xyxZzwwCLcB/s1600/images.png" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="https://3.bp.blogspot.com/-drw-odALqNo/V9GJSYIOITI/AAAAAAAABJU/BPgzDGKj-9AF6q1IACIh4ifwY9xyxZzwwCLcB/s200/images.png" width="200" height="50" /></a></div><br />It’s a headline from an Australian business journal this week but it has a familiar ring to it: “Estate agents’ attempts to boycott major listing portals denied”.<br /><br />If you are an estate agent in the UK you can probably imagine the story without seeing any of the details but for the record the essential ingredients are, in this order: <br /><br />- estate agents generally unhappy at fees charged by portals; <br /><br />- large estate agency group specifically complains that two portals <br />(realestate.com.au and domain.com.au) have “significant market power, charging excessive prices and essentially forcing real estate agents onto premium contracts”; <br /><br />- competitions and markets regulatory body brought into the argument; <br /><br />- official declaration comes from that body that the two portals do actively compete with each other and a boycott - as suggested by the agency group - is not justifiable.<br /><br /><br />You can see the story for yourself on the Australia website realestatebusiness.com.au.<br /><br />The formal legislation is different in Australia, and there is a further appeal process open to the agents, but that argument - with the core being that agents feel portals have too much power over price and content - is pretty much the same as that which exists in the UK.<br /><br />The decision in Australia confirms, to me anyway, that it’s easy to understand the emotional distaste that agents have about portals while it being much harder to see the intellectual argument against them. <br /><br />Emotionally, I think the estate agent’s attitude to portals has much in common with freelance journalists’ attitudes to publishers. In the case of both agents and journalists (so I’ll use the term ‘we’ to include both groups) we work to create the content - sometimes it’s easy, sometimes it’s hard, but either way we scramble to secure the content.<br /><br />The similarity continues - to a point - when it comes to how that content is then displayed. A freelance journalist could, for example, choose to display it on his or her own website (and some do) but the audience would be fairly modest: put that same story on the Sunday Times’ website, or on its printed pages, and the audience expands enormously.<br /><br />Likewise many agents get good responses to content on their own website but - let’s be honest - most rely on portals to put properties in front of the biggest audiences.<br /><br />The similarity breaks down now: of course, agents PAY portals to display the content whereas freelance journalists GET PAID by newspapers. <br /><br />But the difference is not as black and white as that seems: my freelance contributions to the Sunday Times in 2016 receive the same payment as they did in 2006, and my freelance contributions to the Daily Telegraph receive LESS than in 2006 (in absolute terms, not just in relative terms). That’s where the similarity resumes because just as newspapers have the market control to pay contributors less, so portals have the market control to charge their contributors - estate agents - more.<br /><br />So here’s the final similarity between agents and freelance journalists.<br /><br />If both groups were unhappy with their lot, they could always take the publishers and the portals on at their own game - and set themselves up as a rival.<br /><br />While publishers have tried to set up their own niche newspapers (the New Day earlier this year, lasting just a few weeks, for example) almost no journalists have tried: they just don’t have the resources to buy and sustain the massive infrastructure required to take on the big boys in the shape of Associated Newspapers, News Corp and the rest.<br /><br />Estate agents have tried in the past, most recently with OnTheMarket falling short of its chief executive’s targets. Few agents could afford to fund something to challenge Rightmove and Zoopla (probably only Savills, amongst those agents currently involved in OTM, but it has taken a decision not to do so.) <br /><br />So that brings us back to the Australian case this week.<br /><br />In a free market (where agents are free to ignore portals if they wish, and where freelance journalists are free to not write for publications paying the same or less than a decade ago) there is clearly an emotional argument against portals and publishers.<br /><br />But where is the intellectual argument? <br /><br />For good or for bad, we - agents and freelances - need big exposure. It sucks that we don’t get it at the price we want, but we still need it. <br /><br />End of, surely?<br /><br /><br /><small>If you would like to to comment on this article, click <a HREF="mailto:graham.norwood@btinternet.com">HERE</A> to e-mail Graham.</small> <a href="http://www.twitter.com/PropertyJourn"><img src="http://twitter-badges.s3.amazonaws.com/follow_me-a.png" alt="Follow PropertyJourn on Twitter"/></a>Graham Nhttp://www.blogger.com/profile/03519044956367730763noreply@blogger.com0tag:blogger.com,1999:blog-1004631571729949092.post-82866988066944570282016-07-27T17:44:00.002+01:002016-07-27T17:44:09.259+01:00Theresa May - could she go back to the future with MIRAS?<div class="separator" style="clear: both; text-align: center;"><a href="https://1.bp.blogspot.com/-tD_TEYK3n_g/V5jkvONbF6I/AAAAAAAABI8/9Ih0-pyHgugwXP0xxLIAO7k4Eq-FEBJBwCLcB/s1600/images-2.jpeg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="https://1.bp.blogspot.com/-tD_TEYK3n_g/V5jkvONbF6I/AAAAAAAABI8/9Ih0-pyHgugwXP0xxLIAO7k4Eq-FEBJBwCLcB/s200/images-2.jpeg" width="200" height="200" /></a></div>I’m indebted to one of the most enthusiastic estate agents I’ve had the pleasure of meeting for suggesting the subject of this column. <br /><br />He’s come up with an idea that, like many things, may well come back into fashion – and just in time for the new Prime Minister to consider.<br /><br />That agent is Andrew Bullivant, partner in the Attwell Martin agency in Plymouth, and his idea is one with national application – why don’t we bring back MIRAS?<br /><br />For readers below a certain age MIRAS was Mortgage Interest Relief At Source, a clunky title for an interesting idea: back in 1969 it was introduced by a then-Labour government to promote ownership through offering tax relief on the interest payments of house loans, being rapidly extended under the Thatcher administrations of the 1980s.<br /><br />It was retained by Conservative and Labour governments alike before being modified in the 1990s and then abolished completely in 2000 by the Blair government, which culled it after the relief was described (by many politicians of all parties) as a middle-class perk.<br /><br />So is it time now, with an economy arguably in grave peril because of Brexit, to bring this back as a fillip to the housing market and a 21st century endorsement of home ownership?<br /><br />Of course those who want no government interference in the operations of the free market, MIRAS is anathema – but surely it would be a lot fairer and far more effective than the raft of interventions we already have?<br /><br />Help To Buy, although undoubtedly of use to some young purchasers, has perhaps been most successful for boosting up the share prices of housebuilders; Right To Buy may have been a liberating force for some council tenants 30 years ago but now seems little more than a way of helping would-be landlords asset-strip the national housing stock; and as for Shared Ownership...well, restrictions on owners and difficulties in stepping up the share of ownership are well-known, and difficulties in re-selling have become legendary.<br /><br />So by contrast, what would be so wrong with MIRAS? <br /><br />A key argument ‘against’ would be that interest rates are tiny now anyway, so giving tax relief on them would have little effect. Well yes they are, but that is unlikely to stay the case for long – remember the series of warnings recently made by Bank of England governor Mark Carney that rates are likely to rise in the future. MIRAS might encourage buyers who are currently deterred by what might be to come in the next two to four years.<br /><br />Another argument against it would be that it would benefit the wealthiest as well as the less affluent. Well, perhaps, but for a start it could be targeted at some kinds of buyers – first timers, those purchasing beneath a specific price threshold, and so on. And don’t forget, many of the wealthiest owners and buyers no longer have mortgages anyway: the latest data, from 2014, shows 7.4m outright owners and 6.9m owners with mortgages.<br /><br />A third contention is that MIRAS would apply across the market and not specifically target key sectors, particularly new-builds. Well in a way that’s the point – new-build developers done well under Help To Buy (without necessarily helping the national housing shortage, by the way) so why not use MIRAS to spur transactions of all homes, not just new ones?<br /><br />MIRAS would not be a silver bullet, of course.<br /><br />The possible downsides of Brexit to the housing market may well take a lot more than one measure to address. But it would be a positive help for agents and buyers and a sign by a new government that it recognises the housing market needs some help.<br /><br />There’s a lot in Theresa May’s in-tray right now. But how about MIRAS being an initiative from her new housing minister?<br /><br /><small>If you would like to to comment on this article, click <a HREF="mailto:graham.norwood@btinternet.com">HERE</A> to e-mail Graham.</small> <a href="http://www.twitter.com/PropertyJourn"><img src="https://twitter-badges.s3.amazonaws.com/follow_me-a.png" alt="Follow PropertyJourn on Twitter"></a>Graham Nhttp://www.blogger.com/profile/03519044956367730763noreply@blogger.com0tag:blogger.com,1999:blog-1004631571729949092.post-65757305535529192732016-07-18T03:52:00.000+01:002016-07-18T03:57:14.155+01:00Brexit: Six Things We've Learned<div class="separator" style="clear: both; text-align: center;"><a href="https://3.bp.blogspot.com/-zGoCG54NFZ0/V4xEbrdFqtI/AAAAAAAABIs/a7MAqQ84wFUTa-MFdcLPdzkHryi0l1_KACLcB/s1600/images.jpeg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="https://3.bp.blogspot.com/-zGoCG54NFZ0/V4xEbrdFqtI/AAAAAAAABIs/a7MAqQ84wFUTa-MFdcLPdzkHryi0l1_KACLcB/s200/images.jpeg" width="200" height="112" /></a></div>It’s over. A win is a win, whichever side you backed. <br /><br />It’s true that everyone seems a lot less happy than they were a short while ago, but one has to hope the heat will give way to light - perhaps soon it will be time to move on and look to the (admittedly uncertain) future.<br /><br />But wait just a moment. <br /><br />What have we learned as an industry from a four month campaign, from an unexpected result, and from the extraordinary volatile aftermath?<br /><br />Such lessons are inevitably subjective, perhaps like the ‘facts’ that fuelled the referendum debate, but by my calculation there are six things we know now that we didn’t before.<br /><br />1. <b>The Industry Is Out Of Sync With The Public</b>: This isn’t a problem - just a fact. Surveys from sources as varied as RICS to Carter Jonas to the Property Industry Eye blog, and from a string of business and economic consultancies, all made it clear that a very substantial majority of estate agents and property professionals were pro-Remain. A small but nonetheless clear majority of the public were of a different opinion.<br /><br />2. <b>For Our Industry, The Economy Is Paramount</b>: The public took immigration to be the biggest issue while we felt it was economics - at least judging from the responses to those many industry surveys and analyses. Maybe it was self-interest, maybe as an industry we’re more outward looking, or maybe we’re more sceptical of politicians who talk of migrant problems - both real and mythical. Either way, property people were pro-migration with few disputing that construction relies heavily on EU labour and many saying that inward migration was positively good for the lettings sector.<br /><br />3. <b>Housing Supply Wasn’t A Big Issue</b>: Unlike the 2015 general election, when housing supply was a hot topic, there was little debate on it this time with the exception of those making a point about immigration. A wider view of housing - quality of life, where you live, waiting lists, prices - played some part, especially in poorer areas of the country where the public felt there were too many people chasing too few homes. Some Leave politicians addressed this but very few Remainers did, and perhaps if politicians of all hues took the lack of supply seriously, the result may have been different.<br /><br />4. <b>House Builders Are More ‘Transparent’ Than Major Agencies</b>: Well, maybe. Perhaps because many more volume house builders are quoted on the stock market they felt obliged to speak out (and several did, almost all saying a Brexit would be bad for their business). Few corporate estate agencies did the same: most followed the lead of Countrywide at the start of the year which said it was not an issue it felt comfortable talking about. They were probably proven right by the result as all agents now have to sell vendors’ houses and make the best of a difficult economic landscape.<br /><br />5. <b>Central London Is Even More Investor-Led Than We Thought</b>: We knew it in principle but the degree to which central London relies on foreign buyers was brought home when even the relatively few agents who ‘came out’ for a Brexit then ferociously tried to curry favour with global investors. They did this during the campaign by making a point of saying the fall in the Pound had an upside in bringing in foreign investors - it’s up to them how they try to reconcile that with “getting back their country.”<br /><br />6. <b>The NAEA and ARLA Really Can Do Research</b>: As a journalist I’ve often wondered why these bodies typically generate such poor research (rarely a patch on business consultancies or some estate agencies). But the NAEA and ARLA’s EU report in May, drawn up with the Centre for Economic and Business Research, was as good as any during the debate. It was level-headed, balanced, insisted there were no easy answers - with plenty of data to back up each of its assertions. More research like this please, once the industry has got over the biggest political and economic shock in a generation.<br /><br /><i>This blog originally appeared on the Features section of Estate Agent Today and Letting Agent Today<br /></i><br /><small>If you would like to to comment on this article, click <a HREF="mailto:graham.norwood@btinternet.com">HERE</A> to e-mail Graham.</small> <a href="http://www.twitter.com/PropertyJourn"><img src="http://twitter-badges.s3.amazonaws.com/follow_me-a.png" alt="Follow PropertyJourn on Twitter"/></a>Graham Nhttp://www.blogger.com/profile/03519044956367730763noreply@blogger.com0tag:blogger.com,1999:blog-1004631571729949092.post-293351764502924702016-06-08T17:41:00.002+01:002016-06-08T17:42:49.529+01:00Education, Education Education ....and Buying and Renting, too<div class="separator" style="clear: both; text-align: center;"><a href="https://3.bp.blogspot.com/-R3ol9afN-gE/V1hKrTrqi5I/AAAAAAAABIc/M4fLcI6MBx0KOqRkIzi6UQe_cyV7ao6HACLcB/s1600/images.jpeg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="https://3.bp.blogspot.com/-R3ol9afN-gE/V1hKrTrqi5I/AAAAAAAABIc/M4fLcI6MBx0KOqRkIzi6UQe_cyV7ao6HACLcB/s200/images.jpeg" /></a></div>So what is it with young people failing to stand up for themselves and not making the most of their money when it comes to renting or buying property for the first time? <br /><br />With start-ups and websites coming out of our online ears offering guidance as to what to watch for when renting for the first time, or applying for a mortgage, or budgeting properly to take that initial step on the ownership ladder, what’s the excuse for not knowing?<br /><br />Apologies for sounding like the proverbial old fart here, but evidence from a trio of surveys suggests there is more than a little ignorance of what to do, when and how.<br /><br />Survey one comes from The Legal Education Foundation and reveals that first time tenants are many times more likely to have housing-related issues – from debt to eviction – than their owner-occupying counterparts. Often this is down to ignorance of processes or rights and not down to more substantial issues such as poverty or rogue landlords. <br /><br />Staggeringly, some 47 per cent of renters felt their housing problem is likely to be down to bad luck rather than something they could partly or fully resolve themselves.<br /><br />Survey two is from Aviva and reveals that almost three quarters of first time buyers do not budget sufficiently to buy a new home – and not because of the sudden leap in payments to service a mortgage, but because they are simply unaware of typical transaction costs. <br /><br />Specifically, the study suggests average FTBs save around £6,500 too little for the ‘best’ deposit for their home – often because they do not understand mortgages rather than because they cannot afford to save more – and FTBs also spend £1,680 more than budgeted for on essential repairs as soon as they move into their first home. <br /><br />Survey three is the NatWest Millennials Home Buying study revealing, amongst other things, that 25 per cent of millennials actively looking to purchase their home have not heard of Help To Buy; of those who have heard of it, 44 per cent don’t know how to apply.<br /><br />Meanwhile 41 per cent of respondents admit to not having any idea how much deposit may be required to buy a home even though, presumably, they could easily Google it.<br /><br />OK, OK – I know, this is an unfair attack.<br /><br />I’m from the golden generation who benefitted from extraordinary and never-to-be-repeated house price inflation and easily-available 100 per cent mortgages. <br /><br />Therefore I no doubt had much more incentive to discover the nuts and bolts of house buying than would have been the case had I been born three decades later and faced with a slew of financial mountains to climb, from student debt to massive house price deposits.<br /><br />So here’s an idea for politicians and policy-makers: why not bring an understanding of renting and house buying into the formal education process?<br /><br />I’m not after turning 16 year olds into estate agents (we already have a few of those).<br /><br />Instead I am suggesting a consumer-oriented practical component of every young person’s education, around the age of 16, explaining how to rent and how to buy – the rights they will have, a few basics about the differences between surveys and valuations, the lowdown on how to apply for a mortgage with or without parental financial assistance.<br /><br />This need not be an alternative to academic or vocational education – just a short but highly practical addition to the syllabus to prepare people for what will be one of the biggest decisions of their lives, to move away from their parents by renting or buying.<br /><br />We do the same within our structured education framework, albeit in a more nuanced way, when preparing much younger children to go out by themselves on busy roads, advising them how to respond to ‘stranger danger’, and even show basic courtesy and manners. <br /><br />Yet we do nothing to educate teenagers how to make the best of renting or buying a home for the first time – surely something that falls under the category of David Cameron now likes to call “life chances.”<br /><br />Would an occasional hour given to explaining one of life’s more daunting and expensive processes not help prepare people to make more of their opportunities?<br /><br />It sounds a good idea to me – and might make reading those survey results a lot less depressing.<br /><br /><br /><small>If you would like to to comment on this article, click <a HREF="mailto:graham.norwood@btinternet.com">HERE</A> to e-mail Graham.</small> <a href="http://www.twitter.com/PropertyJourn"><img src="https://twitter-badges.s3.amazonaws.com/follow_me-a.png" alt="Follow PropertyJourn on Twitter"></a>Graham Nhttp://www.blogger.com/profile/03519044956367730763noreply@blogger.com0tag:blogger.com,1999:blog-1004631571729949092.post-84538428454071784132016-05-20T13:51:00.001+01:002016-05-20T13:51:23.910+01:00Hold The Front Page - no, don't bother, no one reads it any more...<div class="separator" style="clear: both; text-align: center;"><a href="https://2.bp.blogspot.com/-J_NWBWxztTc/Vz8IPbPHI_I/AAAAAAAABIM/iRLLY5WcrzgxqJNPT9pk8FvHuipl1JNsACLcB/s1600/Hold-the-front-pageMB2.jpeg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="https://2.bp.blogspot.com/-J_NWBWxztTc/Vz8IPbPHI_I/AAAAAAAABIM/iRLLY5WcrzgxqJNPT9pk8FvHuipl1JNsACLcB/s200/Hold-the-front-pageMB2.jpeg" /></a></div>I wish it were otherwise, but there’s a crisis just beginning to sweep over newspapers – with, a bit beneath the surface, a quandary for print property advertisers.<br /><br />Now it’s become a truism that print is in trouble, overtaken and overwhelmed by the internet; you probably don’t need convincing but if you want a couple of figures to prove the point, try these from the Audit Bureau of Circulations:<br /><br />- in 2010 the Sun’s average daily print circulation was 3,006,565 and in 2016 so far it’s 1,787,096 (so a loss of over 40 per cent in six years);<br /><br />- in 2010 the Daily Telegraph had a print circulation of 691,128 and this year it’s down to 472,033 – so about a third down;<br /><br />- over the same six year period, The Guardian’s print run has dropped from 302,285 to 164,163 – the best part of 50 per cent down;<br /><br />- New Day, the (frankly half-baked) national launched earlier this year sold ad space on the basis of a 200,000 daily readership, never reached that and closed with under 30,000.<br /><br />So far, so obvious to observers of digital progress.<br /><br />Hand in hand with this is the fact that advertisers are reassessing whether print is worth using. I was struck by recent figures showing that the UK ad market grew at a staggering 7.5 per cent in 2015 yet advertising in newspapers suffered an 11 per cent fall, despite cut-price rates being offered by some titles. <br /><br />The latest change is that until now there was a belief (or perhaps hope) that advertisers who shunned print newspapers would stay loyal to those same newspapers’ online output. <br /><br />But that’s no longer the case. Some figures now show that digital advertising for the online versions of the old-school newspapers, too, appears to be on the slide. It’s early days, but it’s falling.<br /><br />So where is this 7.5 per cent advertising spend increase actually going? <br /><br />A lot, it seems, is going into Facebook; its profits tripled in 2015 and much of that is down to its shrewd emphasis on making its output suitable for mobile phones and tablets. <br /><br />Like our own industry’s property portals, the advertisers know the future is hand-held.<br /><br />So in the light of all this, whither property advertising?<br /><br />Reaching 770,000 sophisticated well-targeted readers remains a key objective of those who choose to advertise in the print version of the Sunday Times (that’s its latest 2016 circulation figure – down only a third from 2010, so less than other rivals). My guess is that this title, and The Times and Financial Times, will keep a solid if declining print readership.<br /><br />But is it time for estate agents to finally give up the ghost on local print and start putting marketing money into digital advertising? Facebook perhaps, with local ads determined by the location of the Facebook user?<br /><br />And should some national agents and developers try advertising on truly digital national news services without any newspaper history – Huffington Post or Buzzfeed perhaps?<br /><br />As has been the case with online technology for the best part of 20 years now, no one knows the definite way forward. <br /><br />It’s just that it’s now looking like we know for sure what ISN’T the way forward – and that’s the newspaper.<br /><i><br />*This blog first appeared on the Industry Views section of Estate Agent Today and Letting Agent Today</i><br /><br /><br /><small>If you would like to to comment on this article, click <a HREF="mailto:graham.norwood@btinternet.com">HERE</A> to e-mail Graham.</small> <a href="http://www.twitter.com/PropertyJourn"><img src="http://twitter-badges.s3.amazonaws.com/follow_me-a.png" alt="Follow PropertyJourn on Twitter"/></a>Graham Nhttp://www.blogger.com/profile/03519044956367730763noreply@blogger.com0tag:blogger.com,1999:blog-1004631571729949092.post-91989253273847472252016-04-24T22:46:00.000+01:002016-04-24T22:46:27.085+01:00Sleazy Does It - How Estate Agents Need To Get A Better Look<div class="separator" style="clear: both; text-align: center;"><a href="https://2.bp.blogspot.com/-4YhH-pUTmyc/Vx0-nvqfmoI/AAAAAAAABH8/OVcjN3rh7s0_CPZ0MZAEfC0f60OjG5puQCLcB/s1600/images-2.jpeg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="https://2.bp.blogspot.com/-4YhH-pUTmyc/Vx0-nvqfmoI/AAAAAAAABH8/OVcjN3rh7s0_CPZ0MZAEfC0f60OjG5puQCLcB/s200/images-2.jpeg" /></a></div>It’s all too easy to look sleazy in the eyes of a sceptical world, and there’s a danger right now that a few elements of estate agency are beginning to have precisely that problem.<br /><br />I say that because it’s not been a good week for the industry, image-wise.<br /><br />The chief executive of Foxtons has been given a 19 per cent pay rise with a substantial hike in potential future bonuses. He could have a total remuneration package of £2.3m a year once share options are included – not bad for a firm that has suffered a shares slump and faces a high-profile class action legal case from a large group of landlords.<br /><br />Meanwhile Savills’ staff have enjoyed (another) bumper year with a total bonus pool of £345.3m in 2015. That’s up a third on 2014, and was announced just as one of Savills’ more controversial creations – Agents’ Mutual – was threatening legal action against some small-fry agents who struggle to get cash-flow let alone six figure directorial bonuses. <br /><br />Then there was that Panama Papers story. I suspect we have yet to hear the full details about London’s residential property and money laundering; but this epic piece of journalistic research about global tax avoidance (or perhaps worse) comes as we still wait for the results of an apparent investigation by the National Association of Estate Agents. <br /><br />The investigation – you may be forgiven for having forgotten – was triggered by last year’s <br />Channel 4 documentary From Russia With Cash, which started the ball rolling in terms of London estate agents’ image problems. Can this investigation really still be going on? Really? Truly? Taking this long looks at first sight like procrastination, not action.<br /><br />Now I have no doubt that in the bars and restaurants and award ceremonies, estate agents can justifiably explain to each other how all of these things have happened. <br /><br />I imagine it’s said that Foxtons’ chief executive had been underpaid for years, requiring this big adjustment in 2016. And Savills is not backward at coming forward in explaining how successful it is worldwide (and it is – genuinely). Even the NAEA will no doubt get around to revealing the results of its AML investigation at some time.<br /><br />But the problem is, the general public doesn’t work in estate agency nor attend industry awards events. So incidents like those above look...well, perhaps a little sleazy, even in reality they were genuinely justifiable actions that lacked a little finesse in their execution.<br /><br />Plenty of other industries have similar image issues (and God knows journalists have been making themselves look sleazy since shortly before the invention of the pencil) but the outside world seems a little different these days.<br /><br />It’s more puritanical, less forgiving of excess and bad behaviour and – dare I say it – it now demands a functioning moral compass from people who have money, power and status.<br /><br />So while it sounds a little pompous and more than a little pious, might it not be best for the industry if it was a tad more discreet and phased about rewarding senior executives? And a bit less shouty about massive bonuses? And couldn’t the industry make more effort to be transparent about issues-of-the-moment like money laundering? <br /><br />In an era when people are less deferential than ever, a little more subtlety and savvy might just help agents look like the thoughtful professionals we know most of them to be.<br /><br /><small>If you would like to to comment on this article, click <a HREF="mailto:graham.norwood@btinternet.com">HERE</A> to e-mail Graham.</small> <a href="http://www.twitter.com/PropertyJourn"><img src="http://twitter-badges.s3.amazonaws.com/follow_me-a.png" alt="Follow PropertyJourn on Twitter"/></a>Graham Nhttp://www.blogger.com/profile/03519044956367730763noreply@blogger.com0tag:blogger.com,1999:blog-1004631571729949092.post-34392084514926013912016-02-27T12:36:00.003+00:002016-02-27T12:36:25.563+00:00A Little Less Conversation, A Little More Action....<div class="separator" style="clear: both; text-align: center;"><a href="https://1.bp.blogspot.com/-vlToZcy1QVs/VtGYADyOkpI/AAAAAAAABHs/r7U0JP8hPu0/s1600/images.jpeg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="https://1.bp.blogspot.com/-vlToZcy1QVs/VtGYADyOkpI/AAAAAAAABHs/r7U0JP8hPu0/s200/images.jpeg" /></a></div>As we all know, Peter Redfern is critical to the future of the British housing market and....<br /><br />What? Wait? You don’t know who Peter Redfern is? Really?<br /><br />Well, let’s be honest about this. Until a few days ago, he wasn’t a familiar name to me either, despite being a perfectly honourable and successful individual as chief executive of Taylor Wimpey, one of the country’s leading volume house builders.<br /><br />But his significance for the housing market extends beyond that because he has been named as the chair of a review, commissioned by the Labour Party, into the causes of falling home ownership, future home ownership trends, and ‘the housing crisis’.<br /><br />His review will not be partisan in terms of its membership. It is unclear as to the political allegiance of Redfern himself, and the other review members are known to be scrupulously independent and well-regarded in the property industry; they include Dame Kate Barker from Credit Suisse (we’ll come back to her in a moment), Terrie Alafat, chief executive of the Chartered Institute of Housing, and Ian Mulheirn of Oxford Economics.<br /><br />This team will conclude the review by the end of this summer and will report back to Labour’s highly-respected front-bench housing spokesman John Healey, himself a former housing minister in the days of Gordon Brown’s premiership. <br /><br />So far, so worthy: but haven’t we been here before? And more than once?<br /><br />In little more than a decade, three other independent reviews with broadly similar remits (“fix the housing problem” in other words) have been commissioned by governments or parties. For those who missed them, ignored them and never heard of them, they were:<br /><br /><br /><b>1. Barker Review of 2004 <br /></b><br />Chaired by – yes, you guessed it – the same Kate Barker who is now on the Redfern Review, this review was regarded as extremely important at the time and recommended:<br /><br />- the government to help with measures to make homes more affordable;<br />- additional public spending of up to £1.6 billion per year on social housing;<br />- additional ‘planning gain’ so communities and councils benefitted more from new housing schemes;<br />- changes to local and regional planning processes to allow better, quicker decisions;<br />- measures to identify sites and unlock other barriers to development.<br /><br /><br /><b>2. Calcutt Review of 2007<br /></b><br />Focusing chiefly on how to deliver more new homes and chaired by John Callcutt, then chief executive of volume housebuilder Crest Nicholson. it recommended:<br /><br />- more edge-of-town settlements;<br />- brownfield development intensified and greenfield development minimised;<br />- more partnerships between councils, developers and government to identify and prepar land, and speed planning processes; <br />- government to stipulate faster build-out of landbanks if involved in joint ventures or partnerships with private builders.<br /><br /><br /><b>3. Lyons Review of 2014<br /></b><br />Chaired by former BBC chairman Sir Michael Lyons, this review was commissioned for Labour but was very well received by the property industry as a whole and recommended:<br /><br />- speeding up planning processes;<br />- stronger government powers to force councils to prepare five-year housing-led plans;<br />- strengthening council powers to compulsorily purchase land;<br />- politicians lead on the need to identify and build on sites, and not continue what it called an ‘artificial shortage’ of sites because of local opposition to development;<br />- planning permission lifetimes cut from five to two years to encourage faster building;<br />- more flexibility on council borrowing to fund house building;<br />- new-builds to be made available to local owner-occupier buyers as a priority;<br />- changes to Right To Buy to allow ‘one-for-one’ replacement with new social housing.<br /><br /><br />So do you see what I mean by “we’ve been here before”?<br /><br />With all respect to Peter Redfern and his colleagues – and they deserve respect, because their task is not easy and all-too-often is thankless – it is nonetheless difficult to imagine what they can come up with that will be more innovative and practical than many of those recommendations produced over the past 12 years from the three previous reviews.<br /><br />What differs now is that the housing shortage is worse, the need greater and the problem arguably higher on the political agenda.<br /><br />What is missing from the three reports listed above – and I bet from the Redfern Review when it reports this year – is one additional recommendation.<br /><br />That is, that politicians should stop kicking the issue into the long grass by ordering more analysis and more discussion, and instead take action on the findings of those past reviews.<br /><br /><i><br />This blog post first appeared on the Industry Views section of Estate Agent Today and Letting Agent Today</i><br /><br /><br /><small>If you would like to to comment on this article, click <a HREF="mailto:graham.norwood@btinternet.com">HERE</A> to e-mail Graham.</small> <a href="http://www.twitter.com/PropertyJourn"><img src="http://twitter-badges.s3.amazonaws.com/follow_me-a.png" alt="Follow PropertyJourn on Twitter"/></a>Graham Nhttp://www.blogger.com/profile/03519044956367730763noreply@blogger.com0tag:blogger.com,1999:blog-1004631571729949092.post-24625453013257555152016-01-16T12:47:00.000+00:002016-01-16T17:12:02.703+00:00You Read It Here First - What Will Happen In 2016<div class="separator" style="clear: both; text-align: center;"><a href="http://2.bp.blogspot.com/-mWm9VHoWRDc/Vpo7wq4SmpI/AAAAAAAABHc/DUJPyUiGemQ/s1600/images.png" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="http://2.bp.blogspot.com/-mWm9VHoWRDc/Vpo7wq4SmpI/AAAAAAAABHc/DUJPyUiGemQ/s200/images.png" /></a></div>There’s been plenty of forecasting in recent weeks - banks, consultancies and high-end estate agents have predicted house prices in the year ahead to one decimal point. <br /><br />Trying to be precise when so many external factors influence house prices risks turning the exercise into...well, a load of crystal balls. <br /><br />So I’m sticking to broad trends: here are my 10 things to look out for in the worlds of agency and housing in 2016. Remember – you read it here first, unless these are all wrong in which case I hope you will have forgotten my predictions over the next 12 months.<br /><br /><br /><b>1. The Rise and Rise of Countrywide</b>: Written off by some – including a few of its own investors – my money’s on new CEO Alison Platt doing dramatic things. Expect a few old brands to be scrapped (upsetting old-school agents) and a Countrywide online service operating by next winter. Expect some sharp barbs from Harry Hill.<br /><br /><b>2. Someone Will Try To Buy OnTheMarket</b>: Of course in theory it’s a mutual and it’s not for sale – but CEO Ian Springett said last summer he was surprised there hadn’t already been a bid. Given its slow progress to date and its down-sized ambitions, pressure to sell may come from one of its founding agents no longer willing to give it time.<br /><br /><b>3. Agents Will Diversify</b>: More will offer property management, mortgages and property-related consumer activities. The reason? Purely and simply to broaden agents’ exposure to new markets and lessen their reliance on traditional sales: in 12 months time, I doubt there will be any great increase in transactions, and therefore fee income.<br /><br /><b>4. There Will Be More Buy To Let Landlords, Not Fewer</b>: Siren voices saying landlords will quit over tax breaks, stamp duty or greater regulation will have proven wide of the mark. Sure, BTL will be tougher than before but with the proportion of households privately renting set to rise to 29 per cent by 2020, why would landlords leave now?<br /><br /><b>5. No Other Online Agency Will Float in 2016</b>: Purplebricks will not hit trouble but its progress from its 100p launch price will be sluggish. easyProperty and eMoov have shown there are other ways to get major investment so those onliners remaining at the top of this small sector will pursue other fundraising efforts than the IPO.<br /><br /><b>6. Ola! Spain Will Be Back</b>: Remember those days when even small independent agents dabbled in overseas property sales of cheap Spanish villas? They may be less cheap than before but as the Spanish recession fades and buying holiday homes in Britain get more expensive (thank you, Chancellor) so agents will again sell a few overseas fincas.<br /><br /><b>7. Expect More Build To Rent</b>: Some forecasts say five per cent of private rental sector homes by 2020 will be purpose-built via institutional investments, so this is an easy prediction. More speculative is where BTR will look when it trickles down from London. Manchester looks likely but some say smaller provincial cities are ripe for BTR, too.<br /><br /><b>8. Interest Rates Will Rise</b>: Okay, okay – so most people say the same, but a few actually believe the wider UK recovery is so fragile it could be 2017 before interest rates rise. The smart money (bet by those smarter than me when it comes to economic policy) is that there may be three very small gradual rises evenly spaced from May to December.<br /><br /><b>9. Zone 2, and possibly Zone 3 Will Become London’s New Zone 1</b>: New-build developers will forsake prime central London as high purchase taxes and buyer fatigue take their toll. One-off hot ‘outer’ markets will appear – I’d guess the Royal Albert Docks, Acton and Woolwich as surprising new hotspots for stylish mid-priced new schemes.<br /><br /><b>10. A National Landlord Licensing Scheme Is Introduced</b>: Why have a patchwork quilt of different schemes run by different councils with different penalties for rogues? The government will do what Labour suggested at the 2015 election and set up a nationwide scheme. Ironically, councils will almost certainly be asked to operate it.<br /><br /><i><br />This blog first appeared in the Industry Views section of Estate Agent Today and Letting Agent Today.</i><br /><br /><small>If you would like to to comment on this article, click <a HREF="mailto:graham.norwood@btinternet.com">HERE</A> to e-mail Graham.</small> <a href="http://www.twitter.com/PropertyJourn"><img src="http://twitter-badges.s3.amazonaws.com/follow_me-a.png" alt="Follow PropertyJourn on Twitter"/></a>Graham Nhttp://www.blogger.com/profile/03519044956367730763noreply@blogger.com0tag:blogger.com,1999:blog-1004631571729949092.post-49101712988523750022015-12-31T09:15:00.000+00:002015-12-31T09:15:21.644+00:00My Winners and Losers in 2015<div class="separator" style="clear: both; text-align: center;"><a href="http://1.bp.blogspot.com/-uNLc8NiqraE/VoTyG2LhxzI/AAAAAAAABHM/fstcGCC_5kU/s1600/2015.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="http://1.bp.blogspot.com/-uNLc8NiqraE/VoTyG2LhxzI/AAAAAAAABHM/fstcGCC_5kU/s200/2015.jpg" /></a></div>It’s time to take a pause, to reflect and put into context - and what a year it has been for our industry with perhaps an unparalleled number of upheavals and shocks.<br /><br />From the raft of legal changes to the lettings sector, through two major stamp duty reforms within 12 months, to a hugely-controversial online estate agency flotation, and the launch of a portal that has perhaps been more a distraction than a disruption, this has been a year of unprecedented upheaval, uncertainty, excitement and good old juicy news.<br /><br />It’s been a pleasure to report on all of this - so we kick back and try to make sense of what has happened, here are my very personal winners and losers of 2015. <br /><br /><br /><b>Winners<br /></b><br /><b>Rightmove:<i></i></b> Some 110 million visitors a month, a healthy share price, growing revenues and an ever-louder presence in the industry. Rightmove is the key to sales and lettings today - and is there any other innovation since the Millennium that has had such a profound influence on our industry? Ironically its 2015 high been produced by high-end agents who wanted their own rival to kill Rightmove stone dead. That worked well, then.<br /><br /><b>Countrywide:<i></i></b> Am I mad to say this is a winner, given its volatile share price and wholesale reorganisation - laced with high-profile leaks about casualties which provided Estate Agent Today with many of its best scoops in the past year? My guess is that this is the pain it must go through to become a 21st century fit-for-purpose estate agency. It’s had the balls to do what others merely talk about - that looks like a win to me.<br /><br /><b>Purplebricks:<i></i></b> Here’s my riskiest bet: its share price may turn out to be its downfall but until it was said to be worth £240m, it looked a shoe-in for my shortlist. It’s got more stock than any other online agency, a higher brand recognition than its rivals and is genuinely rattling some traditional agents at the sharp end of suburban high streets. So it’s a winner - but I’m not ruling out some share price wobbles in the future.<br /><br /><b>Letting Agents: <i></i></b>2015 was the year when amateur landlords must have discovered that buy to let is so complex, so regulated and so financially-volatile that only professional agents can keep across the management of properties and tenants. But what agents must do as a priority is convince the public that the growing red-tape tying up the sector is the very thing that makes letting agents necessary - and worth their fees.<br /><br /><b>Brandon Lewis:<i></i></b> The housing minister has walked a tightrope this year, without falling off (yet). On the one hand, he is genuinely popular and knows his stuff: most of the industry likes him. On the other hand, his government has given ordinary landlords the kind of battering previously reserved for victims in a Tarantino film. If he truly succeeds in getting far more homes built by 2020, of course, he will be forgiven by everyone.<br /><br /><br /><b>Losers</b><br /><br /><b>Landlords:<i></i></b> No surprise here - need I really list the attacks? But while buy-to-letters have become George Osborne’s whipping boy, the Chancellor and other critics can only get away with such treatment because landlords have become deeply unpopular with the wider public. A New Year’s resolution for the NLA, RLA and individual landlords must be to somehow show they are ordinary people providing a genuine housing service.<br /> <br /><b>London’s Property Players: <i></i></b>No, I’m not particularly sorry for prime central London owners or investors who lost a little in 2015: no one seriously thinks they will lose out in the longer term and they’ve enjoyed a very long bull-run anyway. But many agents in London find it increasingly hard to justify the high costs, the few British buyers, the leave-to-let blocks and poor doors that now characterise a once-great housing market.<br /><br /><b>The Conservative Party:<i></i></b> When a high-end buying agency, Property Vision, says some may think the only thing worse for the housing market than a Labour government is... a Conservative government, then you know things have gone awry. Landlords, property entrepreneurs, estate and letting agents are (I would contend) natural Tory backers. Who knows whether they will be that keen to vote for Cameron, or Osborne, next time?<br /><br /><b>Most Online Agents:<i></i></b> Don’t get me wrong - online is here to stay and in 2016 I believe there will be online mergers, perhaps another stock market flotation and at least one huge high street agency group setting up an online service. But after Purplebricks, Tepilo, eMoov, easyProperty, HouseSimple and Hatched, most of the other onliners are too small, lack the marketing budget to get traction, and won’t lift off as their rivals have. <br /> <br /><b>Private Tenants:<i></i></b> There’s enough evidence to show that most tenants are happy with their home’s quality and cost to counter the endless flow of ‘rogue landlord’ stories. But every indicator, bar none, suggests demand for homes to rent will grow far faster than supply, with one inevitable consequence for rent levels. Build To Rent isn’t expanding fast enough and Buy To Let is under government attack - and it’s the tenants who suffer.<br /> <br /><br /><small>If you would like to to comment on this article, click <a HREF="mailto:graham.norwood@btinternet.com">HERE</A> to e-mail Graham.</small> <a href="http://www.twitter.com/PropertyJourn"><img src="http://twitter-badges.s3.amazonaws.com/follow_me-a.png" alt="Follow PropertyJourn on Twitter"/></a>Graham Nhttp://www.blogger.com/profile/03519044956367730763noreply@blogger.com0tag:blogger.com,1999:blog-1004631571729949092.post-85753960077603658502015-11-28T11:55:00.001+00:002015-11-28T11:57:12.268+00:00Build To Rent - What We Can Learn From The US and Germany<div class="separator" style="clear: both; text-align: center;"><a href="http://1.bp.blogspot.com/-PN0UdWAgZwc/VlmWj_S6RgI/AAAAAAAABGk/Pcv7IJlxK7A/s1600/151472868.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="http://1.bp.blogspot.com/-PN0UdWAgZwc/VlmWj_S6RgI/AAAAAAAABGk/Pcv7IJlxK7A/s200/151472868.jpg" /></a></div>I make no apologies for returning to Build To Rent, the institutional investment in building and managing blocks of flats to let – the next big thing in the British residential industry.<br /><br />Some weeks ago I made clear that in my judgement BTR (also known as Build To Let or PRS in some quarters) might actually be a good thing for letting agents as well as a good thing for anyone interested in addressing Britain’s chronic housing shortage.<br /><br />Now I’ve seen two international examples that convince me that BTR can work here; they neither cut across nor diminish the returns of our already prosperous buy to let sector.<br /><br />The first example is Germany.<br /><br />Some 60 per cent of German adults now privately rent – the largest proportion in western Europe and one of the largest in the world. That 60 per cent adds up to 24m households.<br /><br />Around 9.5m of those rental units are built and managed by institutions; the financial vehicles used to fund them range from Real Estate Investment Trusts to banks and even some churches, which have funds and housing-related histories quite unlike UK churches. <br /><br />Germany’s other 14.5m units are owned by small-scale landlords – very much like the British style buy to let sector. Ironically there is greater involvement of letting agencies in the German Build To Rent sector (where institutions leave it to the experts to operate blocks) while Germany’s buy to let landlords typically do their own property management.<br /><br />Further comparisons with the UK are difficult because of Germany’s rent controls. <br /><br />Existing tenants, many of which have been renting the same property for several decades, have controlled rents – a fact that makes institutional investment less appealing because those putting down the money cannot have absolute control of charging. <br /><br />The second example is the United States, where Build To Rent really started (they call it multi-family renting over there, for obscure reasons). <br /><br />Like Britain, the US is slowly reversing its home ownership trend. A decade ago only 31 per cent of the population rented; now it is 35 per cent, accounting for 43m households – some 25m of them are in what in Britain we call Build To Rent accommodation, a figure that was reached more rapidly than expected thanks to the US housing recession.<br /><br />During that recession, roughly 2006 to 2013, mortgages for a lot of house purchases dried up, or became heavily restricted, meaning that not only were there few homes bought by owner-occupiers but few were bought by investors too. This mean that BTR purpose built sector had clear run to become larger – it was the only way new homes were being funded.<br /><br />Now some of the largest US BTR institutions, such as Starwood and CORT, for example, are so large they have their own in-house ‘letting agents’ - skilled staff managing the day to day activities within blocks of 100, 200 or sometimes up to 400 units. But many of the smaller institutions, or those not heavily into Build To Rent, hire in expertise from realtors – in other words, letting agents who exist ‘in the field’, hired in to manage the big blocks.<br /><br />Now there’s no guarantee the UK’s Build To Rent journey – expanding almost monthly now as new schemes get the go-ahead – will necessarily follow either of these examples. <br /><br />But I’m holding firm to the proposition that in this country BTR and Buy To Let will co-exist and possibly even help each other prosper as our private rental sector expands. <br /><br />This new type of letting isn’t a threat – it’s an opportunity.<br /><br /><i>This blog first appeared on the Industry Views section of Estate Agent Today and Letting Agent Today<br /></i><br /><small>If you would like to to comment on this article, click <a HREF="mailto:graham.norwood@btinternet.com">HERE</A> to e-mail Graham.</small> <a href="http://www.twitter.com/PropertyJourn"><img src="http://twitter-badges.s3.amazonaws.com/follow_me-a.png" alt="Follow PropertyJourn on Twitter"/></a>Graham Nhttp://www.blogger.com/profile/03519044956367730763noreply@blogger.com0tag:blogger.com,1999:blog-1004631571729949092.post-16732889795925124452015-10-16T13:57:00.003+01:002015-11-28T11:57:33.889+00:00Build To Rent - A Threat Or A Challenge To Letting Agents?<div class="separator" style="clear: both; text-align: center;"><a href="http://2.bp.blogspot.com/---qp5_kW9QA/ViD0Myvcp4I/AAAAAAAABGM/dqeaBEhpIBk/s1600/images-15.jpeg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="http://2.bp.blogspot.com/---qp5_kW9QA/ViD0Myvcp4I/AAAAAAAABGM/dqeaBEhpIBk/s320/images-15.jpeg" /></a></div>If there’s one thing that looks like a good move right now, it’s becoming a letting agent. <br /><br />Whereas some years ago we used to see letting agents diversifying into sales to get a piece of the growing owner-occupation market, now we see moves in the other direction.<br /><br />The headline figures show why embracing lettings looks sensible. <br /><br />The number of households in the UK expands by 225,000 a year thanks to divorce, inward migration, and the longer lives enjoyed by most. Yet in 2014 the number of new homes built fell below 150,000. If there aren’t homes for people to buy – or the shortage of supply means the homes are too expensive – then of course people will rent instead.<br /><br />Meanwhile data from the Office for National Statistics shows that 9.1m people in England alone privately rent already – that’s 18 per cent of the population, with forecasters from across the property and business industries anticipating that proportion growing sharply.<br /><br />So letting is the game to be in right now – isn’t it?<br /><br />Well, up to a point as someone once said. But there is one thing on the horizon – it’s called Build To Let (or Build To Rent, or PRS, depending on what you read).<br /><br />One of Build To Let’s objectives – or more precisely, the government’s objectives in creating a £1 billion Build To Let fund to encourage investment – is to improve the quantity and quality of private rented stock. <br /><br />Currently 89 per cent of rental units are owned by private landlords – only one in 45 of these owners have 10 or more properties, meaning buy to let in the UK is almost literally a cottage industry.<br /><br />Many people – and I think I fall into this camp – believe Build To Let, in attempting to improve quality and quantity, may actually be good news for some letting agents, while others believe it could be a problem.<br /><br />Here’s why I take the glass-half-full view. <br /><br />There is every evidence that Build To Let will attract institutional investment funds which will bankroll, build and then operate purpose-built blocks of ‘branded’ rental units in locations most likely to produce a good return, based on local employment, wage and demographic forecasts. These are primarily going to be London and major provincial cities.<br /><br />I doubt very much that every investment fund will bother recruiting, training and manage its own staff to operate these blocks: instead they will bring in experienced letting agencies. Not the small letting agencies, I would imagine, but the mid- and large-size agencies.<br /><br />So for those sectors of the agency industry at least, I can see a benefit.<br /><br />But I do not foresee the smaller agencies therefore falling by the wayside – far from it, and for two reasons.<br /><br />Firstly, with the legendary slowness of the UK’s planning system it will take years (and yet more years) for a Build To Let sector to become large. And there is every suggestion that as it does eventually expand, so will the demand for rental property anyway.<br /><br />Secondly, where Build To Let does exist it will aim at the mid- to higher-end tenant; the bulk of renters in the rest of the private sector are likely to still rely on the properties of buy to let landlords and the agents they will use.<br /><br />I can see why this scenario is not universally popular – it effectively makes individuals’ buy to let investments, and the properties let out under this umbrella, a second class kind of rental unit. I don’t disagree with that view, much as I wouldn’t want it to happen.<br /><br />But even so it would mean this: that the size of this country’s growing private rental sector is so large, and growing so much, Buy To Let and Build To Let could easily co-exist.<br /><br />And, if letting agents play their cards right, they could get a bite of both cherries.<br /><i><br />This blog first appeared on the Industry Views section of Estate Agent Today and Letting Agent Today</i><br />Graham Nhttp://www.blogger.com/profile/03519044956367730763noreply@blogger.com0tag:blogger.com,1999:blog-1004631571729949092.post-1857360992578188202015-09-19T10:07:00.001+01:002015-09-19T10:07:55.451+01:00We're All Disrupters Now...<div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/-4clMmmEzduQ/Vf0lsMotBKI/AAAAAAAABFw/-EEzyYE22Lk/s1600/images-14.jpeg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="http://4.bp.blogspot.com/-4clMmmEzduQ/Vf0lsMotBKI/AAAAAAAABFw/-EEzyYE22Lk/s200/images-14.jpeg" /></a></div>It’s become almost obligatory for start-ups in many industries – frequently online agents in the selling and letting business – to say they are ‘disrupting’ the existing business model. <br /><br />But is there any longer just one standard business model from which new players deviate? <br /><br />Recent evidence would show that there are so many variations of what was previously regarded of as a single model for agencies, surely everyone these days deviates from it?<br /><br />Look at these 10 examples of what I mean. No one of these examples quite conforms to our stereotypical preconceptions of ‘traditional’ or ‘online’ agencies, portals or services:<br /><br />1. EweMove: It vigorously denies that it’s an up-front fees online agency, because although it emphasises ‘open all hours’ online credentials, it has some physical offices, too.<br /><br />2. Dybles: This single-office estate agency in Winchester is very much a traditional agency but it now offers the kind of flat fee associated with some online agencies (except it’s still no-sale, no-fee and it’s not an upfront payment).<br /><br />3. Amazing Results!: This franchise, launched in Cheshire, operates online but gets a high street presence, of a kind, by taking over empty windows in local shops to advertise homes (something which some old-school agencies have been doing anyway).<br /><br />4. Purplebricks: It’s online but has agents ‘in the field’ who visit would-be sellers and landlords, and it levies a typical online agency flat-fee structure....except it’s not upfront.<br /><br />5. Countrywide: Surely if a traditional high street estate agency model still exists it will be with Britain’s largest agency group? So it is....except Countrywide has made no secret of the fact that it’s also considering an online ‘brand’ as part of its offering to consumers.<br /><br />6. iProperty: Its website (theipropertycompany.co.uk) looks like a portal and reads like a portal but it’s not – and it isn’t an agency either. Instead, it represents “individuals around the world who want to buy, sell and rent property directly.”<br /><br />7. OnTheMarket: Love it or loathe it, this has disrupted the industry – ironically by providing the same kind of old-school agent-focused portal that existed over a decade ago just as others increasingly emphasise their consumer-facing credentials. <br /><br />8. Ingenious Move: Not quite the same as every other online agency, this one has a fee structure which promises to match – or beat – the selling fee, tenant finding fee or property management fee of any competitor operating in the same area.<br /><br />9. Build To Rent: This fast-emerging sector is a ‘disrupter’ harnessing institutional investors to provide the rental accommodation which has, in the main, been supplied by small scale individual buy to let investors. Some BTR schemes may use letting agents to manage blocks, but some may not. There may, or may not, be a traditional BTR model.<br /><br />10. Dolphin Square Charitable Foundation: OK, so this is in the social housing sector but look at what it’s doing – means-testing tenants and varying their rents accordingly, considered to be a first. How long before some private landlords consider this?<br /><br />Enough already – you get the point I’m making, I’m sure.<br /><br />Although many high street agents believe they stick rigidly to a traditional model, they too have moved – aren’t they all online agents, to some extent, using websites and portals and sometimes their own apps too?<br /><br />And although online agents like to think they have a monopoly on disruption, haven’t many of those, too, moved to adopt some traditional methods such as employing people on the ground to visit clients?<br /><br />In other words, there are so many variations in what agents offer – and when, where and how they offer it – that the concept of the ‘traditional’ model is fact becoming outdated.<br /><br />These days, it seems that we’re all disrupters in one way or another.<br /><br /><br /><i>This article first appeared in the Industry Views section of Estate Agent Today and Letting Agent Today.<b></b></i><br /><br /><br /><small>If you would like to to comment on this article, click <a HREF="mailto:graham.norwood@btinternet.com">HERE</A> to e-mail Graham.</small> <a href="http://www.twitter.com/PropertyJourn"><img src="http://twitter-badges.s3.amazonaws.com/follow_me-a.png" alt="Follow PropertyJourn on Twitter"/></a>Graham Nhttp://www.blogger.com/profile/03519044956367730763noreply@blogger.com0tag:blogger.com,1999:blog-1004631571729949092.post-20997425018102648462015-08-11T09:40:00.000+01:002015-08-11T09:40:29.107+01:00HomeOwners' Alliance - an organisation to watch<div class="separator" style="clear: both; text-align: center;"><a href="http://1.bp.blogspot.com/-Kn1iqf1jLRA/Vcm07arEcOI/AAAAAAAABFc/ePE5iu_4aJM/s1600/timthumb.php.jpeg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="http://1.bp.blogspot.com/-Kn1iqf1jLRA/Vcm07arEcOI/AAAAAAAABFc/ePE5iu_4aJM/s320/timthumb.php.jpeg" /></a></div>There is a very interesting but easily-overlooked piece of information at the end of the National Trading Standards Estate Agent Team’s new draft compliance guidance – it's a document intended for estate agents so it's very 'industry' and you can <a href="http://pstatic.powys.gov.uk/fileadmin/Docs/Estate_Agency/NTSEAT_guidance_on_property_sales_-_June_2015__draft__en.pdf">see it here</a>.<br /><br />But there's an interesting consumer element to this tale.<br /><br />On the final page there is a list of the organisations thanked by NTSEAT for their help reviewing the draft. <br /><br />There were the usual professional bodies like NFOPP, NAEA, RICS and others. NTSEAT’s thanks also went to the three redress schemes and various council trading standards divisions. <br /><br />But sticking out like the proverbial sore thumb – in a good way – was the listing of the HomeOwners‘ Alliance. This is an online body led, so its website suggests, by a random and small group of enthusiastic middle-class home owners.<br /><br />Its mission, it says, is “to take the stress, uncertainty and unnecessary expense out of buying and owning a home” and to help would-be owners realise their ambition. It takes the view that existing and future owners are amateurs facing an array of mortgage and property people who are full-time professionals. That’s not always fair, it believes.<br /><br />Whether we agree with that or not, the HOA was the only consumer-facing body (as opposed to complainant-facing) which, at this stage of the guidelines, appears to have been asked for input. <br /><br />And it was this fact that struck me as being interesting. <br /><br />NTSEAT had not asked, say, Which? - the organisation that for years has been described (usually by itself, to be honest) as the consumers’ champion. <br /><br />And there were no comments requested from Shelter, which has shifted in recent years from being a homeless charity to a campaigning ginger group on housing-related matters.<br /><br />The HOA’s rise to significance has been quiet but impressive, and built party on not being afraid to take on the often-intimidating property, estate agency and letting agency establishment (of which, I guess, I am a member – even as a property journalist).<br /><br />On this website it gained some notoriety 18 months ago when it accused letting agents of being less-than-transparent with their fee structures. <br /><br />It also won the ire of traditional agents by championing – or at least highlighting the potential – of online estate agents, with a very thorough roadtest of several, highlighting good and bad points. <br /><br />And early this year it was outspoken in its warnings of the pitfalls of sellers instructing agents who were dropping one of the big two portals and using OnTheMarket.<br /><br />It was also very thorough in its analyses of the political parties’ housing policies ahead of the May election.<br /><br />All of these benefitted the organisation in numerous ways, not least of which was that the HOA was quoted extensively in national newspapers and online, and making them be regarded by opinion-formers as an authentic voice on property-related issues. <br /><br />In other words the HOA consistently fights the housing market consumers’ corner in public.<br /><br />It follows this through in less dramatic ways, by packing its website with consumer-facing information about buying, selling and advice. <br /><br />As a journalist writing for a range of property media I have found the HOA straight to deal with and – despite lacking the funds to hire a public relations person – it still manages to be quicker at responding to requests for information than, say, the NAEA. <br /> <br />This is not meant as a special endorsement of this particular organisation more than of any other, but it is clear to me that by being consulted by NTSEAT, the HOA has ‘arrived’.<br /><br />In an era of From Russia With Cash, when elements of our industry may not be covering themselves with glory, estate agents and the rest of us in this business could do worse than recognising that the HOA – and consumers it represents – may be worth engaging with.<br /><i><br />This article first appeared in the Industry Views section of Estate Agent Today and Letting Agent Today.</i><br /><br /><small>If you would like to to comment on this article, click <a HREF="mailto:graham.norwood@btinternet.com">HERE</A> to e-mail Graham.</small> <a href="http://www.twitter.com/PropertyJourn"><img src="http://twitter-badges.s3.amazonaws.com/follow_me-a.png" alt="Follow PropertyJourn on Twitter"/></a>Graham Nhttp://www.blogger.com/profile/03519044956367730763noreply@blogger.com0